Big‐Box Stores and Urban Land Prices: Friend or Foe?

Using a spatial difference-in-differences research design, this paper examined the effect of a new Walmart store on nearby U.S. urban land prices and found that, within one quarter mile of a new Walmart store locale, land prices increased by almost 39% over the four-year development time period (from site negotiation to the store opening) compared with land located from one to three miles from the new store site. The analysis found that land prices increased almost geometrically over the development period as information leakage implied that a new store would actually be built and that demand for nearby land would increase. The positive effects were found to dissipate with distance from the new store, suggesting that the Walmart effect is highly localized. The analysis also found that supercenters, as opposed to discount stores, and commercial land sales, as opposed to residential land sales, were instrumental in driving the positive price effects. Also, robustness tests found a positive land price effect with other big-box stores, suggesting that the land price effect was not limited to Walmart stores, but in fact, was a big-box store effect. This article is protected by copyright. All rights reserved