Abstract
Many authors have tried to assess the benefits of public works, including transport improvements, through the property value method. As the method is valid only when the small-open assumption is fulfilled, it is quite important to confirm the openness of the city when we ask for a fair cost-sharing on the ground of value captures. In the paper, we first review the results from a NUE city to clarify how the benefits from the reduced travel costs are theoretically absorbed by respective agents. The empirical study is conducted on Fukuoka city where the subways were constructed in early 80's. We employ a land value function to assess the portions of increases in land values which are attributable to the subways. Comparing those empirical results with the theoretical ones, we evaluate the openness of the study area, and thus, the validity of the property value method in local cities.
