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Rapid evidence review: Rail investment

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This rapid evidence review looked for studies that examined the effects of rail investment on local economic outcomes including on employment, business performance and property prices. Our search identified 29 studies, including 11 that were in our transport evidence review.

What is rail investment

Rail investment includes investment in physical rail infrastructure – predominately lines and stations – and covers light rail, subway, heavy rail, and high-speed rail. Investment in the rail network has the potential to impact on local economies by reducing transport costs and stimulating the economy.

What the evidence showed

What impact does rail investment have on local employment?

  • The impact of rail investment on employment is mixed. Some studies find positive effects, whilst others find no effects.
  • In some cases, there is a positive effect on employment near the station, but this is offset by a decline in employment further away.
  • Some studies find that the employment effects vary across sectors or occupations.
  • There is some evidence that rail investment leads to displacement of lower-income or lower-skilled populations.

What impact does rail investment have on local business performance?

  • The impact of rail investment on the number of businesses and business starts is mixed.
  • Many studies find some positive findings, but there are several reasons to be cautious about these. As with employment, some studies find positive effects near the station that are offset by declines further away. Some studies looked at sectors where an impact on business numbers or starts was most likely, meaning the findings may not be more widely applicable.
  • Only one study looks at impacts on business performance and productivity and finds positive effects.

What impact does rail investment have on local property prices and land use?

  • Most studies that look at the impact of rail investment on residential property prices find a positive effect.
  • The scale of the effects is highly varied, with this partly reflecting the varied time periods and geographies considered.
  • Where studies look at effects over multiple distances, they find that effects decrease with distance.
  • There is much more limited evidence on commercial property prices, with the only study that looked at this as a stand-alone category finding no effect.
  • Only one study looks at impacts on land use and finds a small and very localised effect.

Where there was lack of evidence

  • We need more evidence from the UK of the effects on employment, number of businesses, property prices and the composition of residents.
  • We also need more evidence on impacts on commercial property prices and land use and more evidence from rail networks that serve towns and smaller cities.

Things to consider

  • Policymakers should be realistic about the likely employment and business impacts of rail investment. While some studies find that new and extended rail lines increase employment and the number of businesses in the areas around new stations, others find no effect.
  • Policymakers should be aware that employment impacts are likely to occur close to stations and possibly come at the expense of other areas nearby. Findings are similar for businesses.
  • Policymakers should consider current and future housing supply to understand the potential impact of any rail investment on local property prices.
  • Policymakers should carefully consider and monitor the impact of rail investment on local communities. Some studies suggest investment may lead to lower-skilled or lower-income households being displaced. 


Rapid evidence review: rail investment