The Xueshan Tunnel and the Enlargement of the Taipei Metropolitan Area

Xueshan Tunnel has halved the travel time between central Yilan County and downtown Taipei from 90 to 45 minutes. The improved accessibility has transformed the economic opportunities of residents in the affected area. This paper analyses the pace of change by comparing estimated hedonic price functions for Yilan County during five different time periods - from the onset of construction to the initial period after its completion. The estimated accessibility effects show that the implicit price of relative access to central Taipei exhibits an upward trend, which indicates the spatial enlargement of Taipei's housing and labour markets.