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Paper Session

Saturday, Jan. 4, 2020 2:30 PM - 4:30 PM (PDT)

Manchester Grand Hyatt, Regatta C
Hosted By: American Real Estate and Urban Economics Association
  • Chair: Edward Coulson, University of California-Irvine

Facilitating Investment Flows: Evidence from China's High-Speed Passenger Rail Network

Yu Qin
National University of Singapore
Yatang Lin
Hong Kong University of Science and Technology
Johan Sulaeman
National University of Singapore
Jubo Yan
Nanyang Technological University
Jialiang Zhang
Peking University


This paper investigates how transportation infrastructure projects facilitate interregional flows of private investments, by exploiting the staggered expansions of passenger high-speed rail (HSR) network as plausibly exogenous shocks to the ease of travel between cities. Drawing on a unique dataset of the universe of firm registrations in China, we document that the introduction of a direct HSR connection between a pair of cities increases the amount of cross-city investment between the pair by 45%. We control for city-pair fixed effects to capture static linkages between the cities –e.g., geographical distance, cultural proximity– as well as city-time fixed effects to capture any variations in economic dynamics across and within cities. We find similar patterns when examining new connections between cities that are already on the HSR network but have not been connected to each other, and city-pairs that are indirectly connected by new routes. The HSR effects exist for both investors considering controlling stakes (more than 50% share in invested firms) and non-controlling stakes, suggesting that apart from facilitating monitoring, transportation infrastructure helps reduce information frictions in portfolio investment decisions and allows investors to discover and evaluate investment opportunities in other cities.

Public Transport, Noise Complaints, and Housing: Evidence from Sentiment Analysis in Singapore

Yi Fan
National University of Singapore
Xinwei Wan
University of Cambridge
Ho Pin Teo
National University of Singapore


This paper investigates the effect of a new bus route on subjective noise complaints of residents
and the influence of noise on housing prices. To overcome the challenge of mapping noise data with
subjective emotion, we use a novel data source—text-based noise complaint records from residents
in a town in Singapore—and apply natural language processing (NLP) tools to conduct sentiment
analysis. To address the endogeneity concern regarding the bus route, we use the hypothetical least-cost path as an instrument for the existing bus route. We find that living closer to the bus route for
every 100 meters increases noise complaints by around 10 percentage points, and the effect is more
severe on medium floor levels (5th- 8th floors) and near bus stops (within 100 meters). We further
link noise with housing price and discover a price reduction of 3% with a 1-scale-point increase
in noise complaints. This implies that bus noise osets 18.8% of the benefit from convenience,
which sheds light on the importance of noise insulation policy and design.

Competition and Quality Gains: New Evidence from the High-Speed Rails and Airlines

Yang (Zoe) Yang
Chinese University of Hong Kong
Hanming Fang
University of Pennsylvania
Long Wang
ShanghaiTech University


This study examines the causal relationship between competition and service quality using the introduction of high-speed rail (HSR) as a clean source of exogenous variation in competition faced by intercity transportation providers. Utilizing a unique dataset containing the details of all flights departing from Beijing to 113 domestic destinations in China since January 2009, we employ a difference-in-differences approach to study the effects of high-speed rail entry on airlines’ service quality (on-time performance) and to identify the channels through which competition stimulates quality. We document two main findings. First, the entry of high-speed rail creates competition for the airline industry and reduces flight delays of the affected flights. Second, the reductions in departure delay, which airlines control mostly, and taxi-in time, which destination airport control, are identified as the sources of the increase in on-time performance.

The Long Run Effects of Uber on Public Transit, Congestion, Sprawl, and the Environment

Weihua Zhao
University of Louisville


Little is known about the long run effects of the widely adopted ride hailing transportation services such as Uber on our cities. This paper examines the long run general equilibrium effects of this new type of transportation service on public transit usage, traffic congestion, urban sprawl, and the environment using a spatial general
equilibrium simulation model of a monocentric city with multiple transport modes. Households optimally choose a commuting mode to work: walking, taking public transit, driving, carpooling, taking Uber, or taking Uber to the nearby transit station to take public transit. The simulation results show that the adoption of Uber reduces traffic congestion, prevents urban sprawl, and lowers energy consumption and carbon emissions. Its effects on the public transit usage depend on the quality of the existing transit system. It complements public transit usage under a high quality transit system while serves as a substitute under a low quality system. In addition, public transit expansion has little effects on traffic congestion and the environment regardless of the entry of Uber. Finally, the regulation imposed on Uber reduces its usage and makes it less effective at complementing public transit and improving the environment.
Janet Kohlhase
University of Houston
Jeffrey Cohen
University of Connecticut
Jan Brueckner
University of California-Irvine
Jeffrey Lin
Federal Reserve Bank of Philadelphia
JEL Classifications
  • R4 - Transportation Economics
  • O1 - Economic Development