Economics & Reinvent seminar: Pedestrianization to increase place attractiveness in cities

Oana Mihaescu, Södertörn University and Head of Research, The Institute of Retail Economics, presents her study "Pedestrianization as an instrument to increase place attractiveness in the urban environment" and results showing that making a street pedestrian can increase property values by up to 7 %

Pedestrianization involves closing off parts of an urban environment, totally or partially, to car traffic. During the last decades, it has often been used as a planning instrument aimed at enhancing the attractiveness of urban space. Pedestrianization, however, remains a controversial topic. Although it is argued to be followed by a series of economic, social, health-related and environmental benefits, there are voices that criticize the implementation of pedestrianization schemes as non-effective to increase the attractiveness of the targeted areas.

The study investigates the effects of pedestrian streets on the urban attractiveness of the Swedish cities, as proxied by property prices. We use a difference-in-difference approach and find that property prices increase by about 2% following the implementation of pedestrian street schemes that are longer than 50 meters, with the largest increase in the direct neighborhood of the new pedestrian streets (7%).

The observed increase of value may be due to the area becoming more attractive for amenities (e.g., retail and restaurants or leisure) that residents seem to particularly value in their choice of location.

To find out more about the project, please visit:

https://www.retailresearch.se/project