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NYC 9/11 Public Portal Document

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inextricably linked is not new. There is an old research tradition on the question of how transport improvements affect the magnitude of changes in land or real estate. Many earlier studies are descriptive. These have focused on the impacts of rapid transit [Spengler (1930), Davis (1965)], expressways [Adkins (1959), Lemly (1959), Golden (1968)], interchange development [Ashley (1965)] and ) interstate highways [Wootan and Haning (I960)] on property values. I More recent studies have utilized statistical analysis. Examples of these are the study of the Philadelphia-Lindenwold High Speed Line by Boyce, Allen, Mudge et. al. (1972) , of a rapid transit line in Toronto by Dewees (1976), and of the Washington, D.C., Metro by Lerman e^ al. (1978). These studies use multivariate linear or nonlinear regression analysis to isolate the effects of various variables including travel related attributes on property values. Two criticisms may be made of these regression studies. First, they deal with a single facility in relative isolation, rather than with an improvement with areawide impacts. Second, regression studies cannot simulate equilibrium changes since the regressions are hedonic relationships - that is, the separate shifts in the demand and supply functions cannot be modeled since supply and demand schedules are not identified in the estimation of the regression models. An appropriate equilibrium model would have to be rooted in the tradition of urban economics while embracing techniques that have proved their worth in modeling travel and related choices. The theoretical literature in urban economics is based on the early studies by Mohring and Harwitz (1962), Alonso (1964), and Mills (1967) . The basic argument of this literature is that part of the savings in travel costs are capitalized into land rents. Arnott and Stiglitz (1981) have used such a model to examine the relationship between uniform improvements in unit transportation costs and the aggregate value of urban land in a monocentric city. Even in such simplified cases, it is not possible to obtain simple quantitative rules of thumb about the direction of change: values may increase or decrease in the aggregate.

Because the theoretical models are so ambiguous, the challenge of operationalizing the theory is even greater. The question of what happens to real estate values both in the aggregate as well as at different locations is largely an empirical question requiring elaborate measurement of key behavioral relationships. Partly in response to this challenge, Anas contributed to a research effort to jointly model household choices of travel and residential location by means of multinomial logit analysis [Warner (1962), Domencich and McFadden (1975), Quigley (1976), Lerman (1977), Anas (1981)]. In Anas (1982), and Anas and Duann (1985), it was demonstrated that supply and demand equations derived from logit analysis can be used to construct an equilibrium model of the

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