Abstract
Little appears to be known about the capitalization of transportation accessibility in South Asian housing markets, which typically differ from those of industrialized countries. This study starts addressing this gap by providing empirical evidence about the nature and the magnitude of the value of accessibility as reflected by residential rents in Rajshahi City, Bangladesh. Results of the authors’ spatial auto-regressive disturbance (SARAR) spatial hedonic model estimated on 526 observations from a random sample collected via in-person interviews indicate that the rent of a multi-unit dwelling decreases by 0.0239% for every 1% increase in network access distance to the nearest major road. Moreover, proximity (within 400 m) to a primary school and to a healthcare facility commands rent premiums of respectively 93.55 BDT ($1.40) and 109.45 BDT ($1.64). Surprisingly, whether access roads are paved or not does not statistically impact rents, probably because of the dominance of walking, rickshaws use, and biking, combined with the rarity of personal cars. Likewise, proximity to bus stops and to train stations is not reflected in rents of multi-family dwellings, likely because buses and trains in Rajshahi City only provide regional and national service. Differences in estimates of the authors’ spatial models between maximum likelihood (ML) and generalized spatial two-stage-least-squares illustrate the danger of relying on ML in the presence of heteroskedasticity. These results should be useful for planning transportation infrastructure funding measures in least developed country cities like Rajshahi City.
