ECONOMICS OF TRANSPORTATION CORRIDORS: FURTHER EMPIRICAL ANALYSIS

THIS PAPER POSES THE QUESTION: DO TRANSPORTATION CORRIDORS MAKE ECONOMIC SENSE? THE ANSWER YIELDED IN EARLIER WORK AND SUPPORTED MORE RIGOROUSLY HERE IS NO. A SAMPLE OF 325 RANDOMLY SELECTED PROPERTIES WERE CHOSEN FROM THE ASSESSMENT ROLES OF THE CITY OF BURNABY, IN THE VANCOUVER, BRITISH COLUMBIA, METROPOLITAN REGION. TWO RELATIONSHIPS WERE EXPLORED. FIRST, WE EXAMINED THE RATE OF INCREASE OF REAL PROPERTY VALUES DURING A 19-YEAR PERIOD FOR WHICH CONSISTENT ASSESSMENT DATA WERE AVAILABLE. A DEFLATED PRICE INDEX WAS DEVELOPED FOR ALL 325 PROPERTIES AND FOR A SMALLER SAMPLE OF SOME 24 PROPERTIES WITHIN 0.2 MILE OF THE TRANS-CANADA HIGHWAY. IN BOTH INSTANCES THE RATE OF APPRECIATION OF THE PROPERTY FELL CONSIDERABLY SHORT OF THE 8 PERCENT OPPORTUNITY COST OF PURCHASING AND HOLDING THE PROPERTY. SECOND, AN ESTIMATE OF THE RENTAL VALUE OF THE ACQUIRED PROPERTY WAS INCLUDED IN THE PREVIOUS CALCULATIONS. HERE, AGAIN, WHEN MANAGEMENT AND OPERATING COSTS, FOREGONE PROPERTY AND INCOME TAXES, AND DEPRECIATION ARE TAKEN INTO ACCOUNT, THE NET REVENUE RESULTING FROM LEASING THE PROPERTY PLUS THE APPRECIATION OF THE PROPERTY STILL DOES NOT COVER THE OPPORTUNITY COST. FROM A STRICTLY ECONOMIC VIEWPOINT, THEREFORE, THE CORRIDOR CONCEPT DOES NOT PAY EVEN WHEN WE ALLOW FOR LEASING OF ACQUIRED PROPERTY. THESE FINDINGS CONFIRM THE PREVIOUS RESULTS AND APPEAR QUITE SOUND. HOWEVER, I WOULD NOT CONCLUDE THAT THE CORRIDOR CONCEPT SHOULD NOT BE APPLIED TO TRANSPORTATION PLANNING. PARTICULARLY WITH THE PRESENT CONCERN FOR SOCIAL AND ENVIRONMENTAL FACTORS, THE CONCEPT HAS MUCH TO RECOMMEND ITSELF. I WOULD URGE, HOWEVER, THAT THESE STRENGTHS BE NOTED AND NOT ITS DUBIOUS ECONOMIES. /AUTHOR/

Media Info

  • Media Type: Print
  • Features: Figures; References; Tables;
  • Pagination: pp 37-51
  • Monograph Title: Use of economic, social and environmental indicators in transportation planning
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00202281
  • Record Type: Publication
  • ISBN: 0309020824
  • Files: TRIS, TRB
  • Created Date: May 7 1973 12:00AM