# A Data-Driven Analysis on the Impact of High-Speed Rails on Land Prices in Taiwan
## 3 Application of System Dynamics
\begin{table}
\begin{tabular}{c c} \hline \hline
**Relationship** & **Explanation** \\ \hline HSR station/Distance to Airport / Road density \(\rightarrow\) Accessibility \(\rightarrow\) Investment opportunities/Tourism & Improved physical access through transport, both public and private, drives both investment and development of the tourism industry. \\ \hline HSR \(\rightarrow\) Accessibility \(\rightarrow\) Tourism \(\rightarrow\) Commercial Activity \(\rightarrow\) Economic growth & Greater accessibility attracts a larger influx of tourists which, in turn, stimulates a greater demand for goods and services (commercial activities generated) and stronger economic growth. \\ \hline Accessibility \(\rightarrow\) Population \(\rightarrow\) Population Density \(\rightarrow\) Infrastructure \(\rightarrow\) Land Price & The more accessible a location is, the greater the ease of commuting thus attracting people to live there. More land is required for infrastructure to support the growing population, contributing to higher land prices. \\ \hline Distance to airport \(\rightarrow\) Population & Although proximity to the airport represents greater accessibility, negative externalities resulting from low-drying aircraft may discourage residents from living in nearby areas. \\ \hline Free trade zone (FTZ) \(\rightarrow\) Number of Companies \(\rightarrow\) Commercial Activity & The ease of doing business in an area serves as a pull factor for businesses, therefore increasing commercial activities and demand for land. \\ \hline Internet Penetration/Tourism \(\rightarrow\) Commercial Activity \(\rightarrow\) Economic growth & The greater the rate of internet penetration and the size of the tourism industry, the more attractive a location for commercial activities. \\ \hline Interest Rate \(\rightarrow\) CPI/Commercial Activity \(\rightarrow\) Exchange Rate & Lower interest rates will lead to more spending and higher commercial activities (feeding into overall price level) thus causing inflation. With inflation, the currency weakers. \\ \hline Economic growth \(\rightarrow\) Uememployment Rate & The stronger an economy, the lower the unemployment rate. \\ \hline Uemployment Rate/Energy Price Index \(\rightarrow\) Affordability \(\rightarrow\) Land Price & The lower the unemployment rate and the costs of utilities, the higher the affordability of a location and the higher the land prices. \\ \hline Construction Cost \(\rightarrow\) Amenities \(\rightarrow\) Infrastructure \(\rightarrow\) Land Price & Lower construction costs increase the economic feasibility of construction projects. The resulting higher level of amenities (and overall infrastructure) available increases land prices. \\ \hline \hline \end{tabular}
\end{table} 
Table 1: Linking up the relationships of the causal loop diagram. Figure 3 below shows a causal loop diagram with all its stocks and constituent components described earlier and their combined effect on land prices. The stocks are accessibility, economy, social, and infrastructure. There are two types of feedback loops in this diagram. For example, positive reinforcement indicates that the presence of an HSR station, a long distance to the airport, and a high road density would increase the amount of accessibility that an HSR brings to the area. A negative reinforcement of a long distance to the airport or the size of the population suggests that the increased accessibility brought about by the HSR would positively contribute to the size of the population and population density that eventually leads to higher land prices. While positive and negative feedback loops may act simultaneously, at different times they may have different strengths. The proposed directions of relationships were identified and verified by observing the degree of positive and negative associations based on a collected dataset of each pair of components or component and stocks in the next section.