High-speed Rail, Urbanisation, and Housing Affordability: Evidence from the Shinkansen System

We re-examine the economic consequences of the Shinkansen in Japan from 1964 to 2010. We examine, separately and jointly, two different episodes in Japanese economic history. We construct a prefecture-level data set for Japan with macroeconomic and socio-demographic variables, as well as data on the opening and operation of each of 10 Shinkansen lines. We provide evidence that high-speed rail has a negative impact on prefecture land prices and is neutral with respect to economic growth, even as it spurs growth around rail stations, induces urban sprawl, increases housing affordability, and reduces overall urban density.