Estimation of Airport Infrastructure Capitalization for Land Value Capture Purposes

Airports are for economic activities and likely affect the value of many resources, including land. We explore the relationship between airport infrastructure and residential land prices in Denver and Atlanta. We use an innovative approach—Local Polynomial Regressions—to separate the value of land from the value of structures at each locally sold property address, and then estimate the impacts of changes in airport infrastructure improvements on land values. In Denver, we find investments in airfields, parking, and intermodal transportation lead to higher land values in the short-run and long-run, while investments in terminals generally have no significant impact or a negative impact (due to congestion) on land values. Due in part to less instability in land prices over the period 2003–2010, these results suggest Denver appears to be the stronger candidate for land value capture than Atlanta. This approach is an important first step in the process of land value capture in Denver.