Economic analysis of a land value capture system used to finance road infrastructure: The case of Bogota, Colombia

"Bogota is a city that faces many problems, among them severe deficiencies in its road infrastructure. Financing of road infrastructure has been possible in part through a land value capture mechanism called ""valorization charges"". The purpose of this thesis is to analyze this financial tool from an economic perspective, using information from the 1992-1994 infrastructure plan of Bogota. A mathematical model is devised to approach this problem. Although valorization has not been specifically modeled in an urban economics setting, such a model derives from optimum taxation and optimum public good pricing theories. From the model two equations are obtained: the optimum valorization equation and the capitalization equation. Data on property values, income, characteristics of the properties, access measures, and valorization at individual property level, were collected in Bogota for two periods (before and after the infrastructure project). Based on the empirical study, it is found that: (1) Valorization charges depend on income and property values in the way predicted by the optimum model. (2) Valorization charges are not capitalized into property values. (3) Individual benefits estimated a-priori by the agency in charge of valorization are incorrectly predicted. (4) On average, the net increase in property values generated by the road infrastructure project 92-94 is of 46 percent beyond inflation effects."

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Regional Planning

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2011

Author dc:creator

• Ortiz, Alexandra

Contributors dc:contributor

• Knaap, Gerrit J.

• Political Science, Public Administration
• Urban and Regional Planning

Statement dc:rights

• Copyright 1996 Ortiz, Alexandra

Language dc:language

eng

Identifier

9780591198461
AAI9712389
(UMI)AAI9712389

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/19531