January 13, 2020

In early January 2019, Transport Minister Khaw Boon Wan announced the final alignment of the Phase 1 MRT Cross Island Line (CRL). Consisting of 12 stations and passing through areas such as Changi, Pasir Ris, Hougang, and Ang Mo Kio, Phase 1 CRL comes shortly after the development of the Downtown Line and the Thomson-East Coast Line over the last 10 years. With an ever-growing transport network, one might wonder how different socio-economic infrastructures in Singapore might change as a result.

Senior Lecturer Eric Fesselmeyer and Associate Professor Liu Haoming from the Department of Economics provide us with an intriguing perspective, in their article ‘How Do Users Value a Network Expansion? Evidence from the Public Transit System in Singapore’ (2018, Institute of Labour Economics Discussion Paper Series).The article studies the effect of the construction of the North-East MRT Line on housing prices; focusing specifically on households that already have access to the MRT network prior to the construction of the North-East line, instead of newly-connected households to the North-East line, this angle has rarely been considered in studies concerning housing prices and transport development.

Using a difference-in-differences approach, Dr Fesselmeyer and A/P Liu utilize housing transaction data provided by the Housing Development Board (HDB), examining differences in resale prices before and after the expansion of the MRT network. Navigating complexities such as housing types, distance from MRT stations and car ownership, the article reveals a more expansive picture of cost-benefit analyses with regards to Singapore’s developing transportation networks.

Read the full article here.