Impacts of a Highway Bypass on Residential Property Values in a Small City in Arkansas

Highway bypasses divert through traffic around a city’s core in part to improve safety and reduce congestion. In small cities, highway related business along the bypassed highway might lose business, contributing to declining economic conditions in the city. There is a need to measure this negative externality to identify mitigating solutions. An established proxy for economic condition is residential property values. Statistical approaches, e.g., ordinary least squares (OLS), are commonly applied to measure the impact of highway bypasses on property values but fail to capture critical spatial relationships inherent in property values. In this study, the authors adopt a hedonic pricing model with considerations for spatial dependencies to estimate the effect of a highway bypass on residential property values in a small city (population less than 25,000) in Arkansas. Neighborhood, network accessibility and disamenity variables are considered. The result of a log-log estimation of a spatial autoregressive model with autoregressive disturbances (SARAR) model on 1,751 properties shows that the residential properties closer to the bypass have lower land value compared to properties closer to bypassed highway, e.g., land value per acre of properties closer to the bypass decreases by 40% or by $15,850. This implies that the bypassed highway provides greater accessibility compared to bypass. A log-log OLS model underestimates the impact of the bypass on property values, e.g., land value closer to the bypass decreases by 24%. Estimates of highway bypass impacts can be used to guide transportation investment decisions made by state transportation agencies.


  • English

Media Info

  • Media Type: Digital/other
  • Features: Figures; Maps; References; Tables;
  • Pagination: 19p

Subject/Index Terms

Filing Info

  • Accession Number: 01763737
  • Record Type: Publication
  • Report/Paper Numbers: TRBAM-21-01535
  • Files: TRIS, TRB, ATRI
  • Created Date: Dec 23 2020 11:10AM