Railway Externalities and Residential Property Prices

This paper examines whether railway pollution is capitalized in residential property prices and derives an estimate of the economic costs of railway pollution. An empirical case study in London, Canada is presented. The evidence supports the hypothesis that railway externalitites are at least partially capitalized in residential property prices. The estimated discount in property prices offers a measure of economic costs of railway pollution in residential areas. This type of information should facilitate urban land use planning and the useful in the evaluation of urban railway relocation and noise abatement projects.