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Direct Approach to Estimating Welfare Changes Brought by a New Subway Line

  • Kosuke Yamashiro
  • Saburo SaitoEmail author
Chapter
Part of the New Frontiers in Regional Science: Asian Perspectives book series (NFRSASIPER, volume 19)

Abstract

In this study, taking up the opening of the new subway line as an example, we propose a new evaluation method for urban development policies based on the retrospective panel data concerning consumers’ micro behaviors. It is a method to directly estimate the utility function of the residents along the subway line and to measure the economic effect of the introduction of the new subway line as welfare changes of those residents. The utility function is formulated as a hierarchical nested CES utility function, in which travel means of buses and subway are expressed as a composite service to provide a city center good and the shortening of travel time to the city center due to the opening of the subway is incorporated as the reduction of the generalized travel cost to the city center. Consequently, the residents along the subway line increase their frequency of visits to the city center and their welfare levels.

Keywords

Retrospective panel data Frequency of visits City center Hierarchical nested utility function CES Cobb-Douglas Generalized travel cost Welfare change Evaluation of urban development policy 

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Copyright information

© Springer Nature Singapore Pte Ltd. 2018

Authors and Affiliations

  1. 1.Department of Business and EconomicsNippon Bunri UniversityOita CityJapan
  2. 2.Faculty of EconomicsFukuoka UniversityFukuokaJapan
  3. 3.Fukuoka University Institute of Quantitative Behavioral Informatics for City and Space Economy (FQBIC)FukuokaJapan

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