The impact of public transportation on property values: Empirical evidence from a spatial econometric model in Thu Duc City, Vietnam

Abstract

This study aims to evaluate the impact of public transportation on property values in Thu Duc City (Vietnam) in recent years, while analyzing the spatial relationships between urban areas through the application of spatial autoregressive models. The research data was collected from various online real estate sources in Thu Duc City, Vietnam, in December 2022. The study compares different models to select the one that best fits the dataset and the initial assumptions. The analysis results indicate that spatial autoregressive models outperform the multiple linear regression (MLR) model, as the MLR exhibits spatial correlation in its residuals. Among the models evaluated, the spatial error model (SEM) with a Queen contiguity matrix is identified as the most optimal. The findings reveal that real estate prices tend to increase when located near public transportation routes, decrease when situated farther from commercial centers, and experience negative impacts when in proximity to train stations. This study provides empirical evidence regarding the spatial factors affecting the real estate market, offering valuable insights for policymakers in making informed decisions to promote sustainable urban development.