UC Irvine Institute of Transportation Studies

In the first part of this report, we employ both hedonic regression analysis and multiple sales techniques to examine how the opening of the toll road network alters house prices in nearby corridors. In the second part, we use a census tract population and employment growth model to examine impact of the toll roads on urban development patterns. 

Urban economic theory posits that the influence of highway improvements on urban growth patterns acts through land prices. If highways improve accessibility, that accessibility premium will be reflected in higher land prices (and ceteris paribus, higher house prices), and higher priced land will be developed more densely. As a first step in better understanding the link between highways and urban development, we examine how the construction of the Orange County toll road network altered house prices in nearby corridors. Understanding the link between house prices, development patterns, and induced travel requires first understanding those related literatures, which we summarize below.