Railroad Development and Land Value

Railroad Development and Land Value Land owners in the rural Midwest experienced significant capital gains during the late 1840s and early 1850s. A primary catalyst of increasing land values was the construction of new railroads. Land in close proximity to new railroads became more valuable because of decreased transportation costs. We use a straightforward model of land price determination to estimate the impact on land values of distance from the railroad. The estimates allow us to infer a lower bound for capital gains attributable to the construction of railroads in Knox County, Illinois, during the 1850s. Knox County landowners reaped capital gains of more than $270,000—9% of the value of land. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Real Estate Finance and Economics Springer Journals

Railroad Development and Land Value

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 1998 by Kluwer Academic Publishers
Subject
Economics; Regional/Spatial Science; Financial Services
ISSN
0895-5638
eISSN
1573-045X
D.O.I.
10.1023/A:1007707801970
Publisher site
See Article on Publisher Site

Abstract

Land owners in the rural Midwest experienced significant capital gains during the late 1840s and early 1850s. A primary catalyst of increasing land values was the construction of new railroads. Land in close proximity to new railroads became more valuable because of decreased transportation costs. We use a straightforward model of land price determination to estimate the impact on land values of distance from the railroad. The estimates allow us to infer a lower bound for capital gains attributable to the construction of railroads in Knox County, Illinois, during the 1850s. Knox County landowners reaped capital gains of more than $270,000—9% of the value of land.

Journal

The Journal of Real Estate Finance and EconomicsSpringer Journals

Published: Oct 6, 2004

References

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