Measuring the Purple Line’s Effect on Residential Rents

Spatial Econometrics and Causal Inference in Urban Policy Analysis

Eli Knaap

San Diego State University

February 13, 2024

TL;DR

  • PL offers a unique opportunity to explore spatial model specifications in a causal inference context
  • ‘Causal’ hedonic models need spatial econometrics
  • The spatial weights matrix (\(W\)/Graph) matters a lot, especially for microdata
  • Spatial models with Fixed Effect (within) designs have a different counterfactual than DID (between) designs
    • within estimator is more appropriate than the between estimator for transit studies (but more difficult data)
  • Contrary to prior research the Purple Line probably caused rents to decrease slightly during the announcement phase, and the spillover effect likely extends beyond the station areas

The Purple Line

A 16-mile light rail line that will extend from Bethesda in Montgomery County to New Carrollton in Prince George’s County. It will provide a direct connection to the Metrorail Red, Green and Orange Lines; at Bethesda, Silver Spring, College Park, and New Carrollton. The Purple Line will also connect to MARC, Amtrak, and local bus services.