Spatial Econometrics: Sustainable Urban Development - Transport Infrastructure Development and Real-Estate Values

M4 metro line has been the biggest transport infrastructure project in Budapest in thepast decades. Taking into consideration the size and importance of the project, scientificliterature owes the evaluation of its economic impacts yet. This paper seeks to address this needwith the exploration of the impact of the new metro line on real estate prices. Design/methodology/approach: To assess the economic effect of the M4 projects on the valueof nearby properties, the method of counterfactual impact evaluation was combined withmeasuring the utility increase with the change of property prices. The research sample coversten subway stations and more than 25.000 dwellings in five districts of Budapest, the analysiswas made for the 2007-2015 period. Findings: When examining the nearby properties at the M4 metro line stations in Budapest, wehave found mixed results for the property prices. The new stations exert a positive effect onlyin those areas which were not connected directly to the existing underground lines. Research/practical implications: I is worth to consider using these results when adoptinga decision on further directions of transport development in Budapest. Nevertheless there isroom for future research focused on the sophistication of distance measurement, the quality ofthe apartments and the examination of other, especially private development processes besidesthe metro investment. Originality/value: The paper presents original research in the field of economic effects of theM4 subway project. As it has been shown in the case of the M4 line, several stations have failedto generate additional economic value. This information is most useful for the planning of futuretransport infrastructure projects.