In this paper we implement a powerful empirical approach than has not previously been appliedto rail transport evaluation to ascertain how much consumers value rail access. We study theeffects on house prices of a transport innovation that altered the distance to the nearest station forsome households, but left others unaffected. The transport innovation we study is theconstruction of new stations under improvements made to the London Underground andDocklands Light Railway in South East London in the late 1990s. Using the innovation toimplement a quasi-experimental approach studying house price changes in affected versusunaffected areas allows us to avoid the biases inherent in cross-sectional valuation work. Ourevidence on distance-station effects on prices suggests that rail access is significantly valued byhouseholds and that these valuations are sizable as compared to the valuations of other localamenities and services.
