IMPACT OF SINGAPORE EXPRESSWAYS ON CONDOMINIUM PRICES : ASSESSING THE COUNTERACTING FORCES OF EXTERNALITIES

Abstract

In many countries, expressways serve as an important function of transporting goods and people from one destination to another effectively. At the national level, expressway increases the productivity of the whole nation by facilitating the movement of goods and services throughout the country. However, the local impact is ambiguous. Other than the benefit of increasing accessibility, noise nuisance created by the moving vehicles, together with the air pollution from traffic congestion have created negative externalities. Most of the previous literature have studied the impact of expressways on housing price without taking the counteraction of the two separate forces into consideration, thereby leading to inconsistent results. The purpose of this research is therefore to assess the individual impact of the opposing forces at play. To facilitate the study, housing data of condominiums in Singapore is collected and distances are derived through the use of Geographic Information System (GIS) and Haversine formula of the Great-circle Distance. With this information, hedonic regression is adopted to facilitate the study. This paper shows that without taking into consideration the counteracting forces, negative relationship exist between house prices and the vertical distance to expressway. However, when distance to expressway entry node is factored in, the relationship between price with vertical distance become positive, implying the existence of negative externalities. On the other hand, there is a negative relationship of price with entry node. The result has implications for understanding the debated links between expressways pollutions and issues of quality living in Singapore.