Project number: MT-11-08

Funding source: Caltrans

Total cost: $89,997

Performance period: August 2010 to July 2011

We exploit the polycentric nature of the Los Angeles Metropolitan area to learn about the impact of new passenger rail stations on land use in the surrounding areas. By using the many centers in the Los Angeles MSA, we are better able to control for variation in trend growth in population and employment density. The parallel trend assumption required of differences-in-differences approach appears to fail under commonly-used controls. Making use of the centers as units of analysis reveals significant growth in both employment and population density around new stations. These results are useful for policy makers interested in assessing the indirect benefits of investment in new stations. The results are also informative for those using the DiD approach in urban settings. While the effects of new stations are significant and positive, there is marked heterogeneity across stations— suggesting that more research is needed to understand the link between new stations and subsequent changes in land use.