Estimating the Value of Undergrounding Electricity and Telecommunications Networks

Underground low-voltage electricity and telecommunications networks have a number of advantages over overhead networks, including reliability of supply, safety and improved visual amenity. This article investigates the value of these benefits to households by estimating the relationship between house prices and type of network service in three suburbs in Canberra, Australia. Holding other house and neighbourhood characteristics constant, we find that underground networks increase house prices by 2.9 per cent. Although the electricity network in Canberra has some unusual features, this approach can provide valuable information to policy-makers considering undergrounding programs in residential areas.