| As urbanization continues to advance,the over-concentration of urban populations has resulted in a range of negative externalities,including rising housing prices and traffic congestion,which severely impact city residents’ welfare and hinder economic development.To mitigate urban transportation pressure,many cities opt to develop public rail transit.However,the high investment costs of rail transit projects and the large gap between operation costs and revenue make each line financially unsustainable,putting local policies under financial strain soon after rail transit construction plans are approved.Rail transit provides externalities leading to real estate price increases near rail transit stations.After the rail transit construction projects are determined,the real estate products along the rail lines are packaged and marketed with the slogan of "subway houses" and "light rail houses" generating excessive profits from rail transit ahead of time,in contrast to the financial difficulties faced by local governments.Internalizing the externality caused by rail transit while stabilizing real estate prices is crucial to ensuring the stable and healthy development of urban rail transit in the future.To provide a scientific answer to this question,it is necessary to quantitatively analyze the anticipated capitalization effect of the urban real estate market after the rail transit construction project is determined and discuss the impact paths of anticipated capitalization effects.Based on the analysis of the approval process for rail transit projects in China,this article will study the problem and refine it to the news shock effect of city rail transit construction plans approved on urban real estate prices.This article begins by outlining the background of China’s rapidly increasing real estate prices and the rapid growth of urban rail transit,which sets the stage for the research question.By reviewing empirical literature in three key research areas: news shock and expectations,the impact of urban rail transit on real estate prices and factors affecting real estate prices,that lays a solid theoretical foundation for subsequent analysis and discussion.The policy context of the research question is then introduced in detail: the development of the approval process for urban rail transit projects.From this approval process,the article discusses in detail the timing of the news shock and the experimental design logic that follows.Using expectation theory,efficient market hypothesis,and land value theory,this article examines possible impact paths on the urban real estate market after the approval of urban rail transit construction plans from the perspectives of local governments,real estate developers,and homebuyers.The article also qualitatively analyzes the impact of public expectations on real estate prices and proposes research hypotheses.Finally,this article uses average commodity housing sales price data from various cities across China between 2000 and 2013.It applies the synthetic DID method proposed by Arkhangelsky in 2021 to estimate the average impact of the first urban rail transit construction plan approved in each city from 2005 to2010 on urban real estate prices.The results indicate that there is a premium effect on real estate prices caused by the expectation of urban rail transit construction planning approval,as the average commodity house sales price of the real treatment group increased by an average of 602.76 to639.05 yuan/square meter compared to the "counterfactual" control group.This article quantifies the anticipated capitalization effect of rail transit on urban real estate prices in the context of each city’s first rail transit approval,filling the research gap on the news shock effect of policy announcements and rail transit’s anticipated capitalization effect on real estate prices from a micro perspective in China.It also helps alleviate the financial pressure of urban rail transit construction,promote the internalization of rail transit externalitiy,and provide empirical evidence for local governments to formulate real estate tax policies,real estate purchase restrictions,and other real estate control policies in accordance with local conditions. |
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