Does infrastructure pave the way for higher property demand? : A difference-in-differences analysis of the effect of the Bothnia Line on real estate prices in Västerbotten

• Main Author: Myrestam, Isak
• Format: Bachelor Thesis
• Language: English
• Published: Uppsala universitet, Nationalekonomiska institutionen 2020
• Subjects: train infrastructure; commuting; real estate prices; hedonic price model; Economics; Nationalekonomi; Northern Sweden
• Online Access: http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-415115

This study explores the concept of improved train infrastructure in Sweden and how it affects the attractiveness of cities. The research uses a difference-in-differences model to determine whether the construction of the Bothnia Line in northern Sweden has had an impact on real estate prices in the municipalities Nordmaling and Robertsfors between 2008-2016. By employing the hedonic price model, the study finds evidence that house-specific factors such total house size in square meters, location near water and size of backyard all play a role in determining the final purchase price of houses in the two municipalities. However, the findings of this study do not indicate that the launch or the subsequent investments on the Bothnia Line has had any measurable impact on the real estate prices in the region. This is in line with previous research on the project.