Analytical Verification of the Link between Reduced Bus Service and Land Value Depreciation

Abstract

Since the numbers of bus service patrons have fallen considerably in recent years, operational considerations have forced bus companies to focus on profitability over public utility, increasingly leading to the cancellation of non-profitable routes. A reduced regional bus service, however, not only deprives area residents of a means of transportation but also decreases the utility of the area, leading to decreased land values and large accompanying socioeconomic loss. To analyze the effects of reduced bus service such as route cancellations and lowered service levels, this study uses a hedonic approach to develop a model that takes bus service as a parameter for a land valuation function, and thereby estimates the decrease in real estate tax revenue caused by bus route cancellations.