Does Propecia cause increase in estrogen?

One thing which is important to understand when using any kind of medication that makes changes to your hormones (like DHT blockers do) is how YOUR body converts hormones.
While some people do convert the released testosterone over to estrogen when using DHT blockers, others do not.  that is why it is so important when implementing any hair regrowth program to perform a full DNA analysis to ensure that a personalized program can be created for you which ensures that you are not causing unwanted side effects by implementing a treatment plan which is not comprehensive in nature.  
I recommend you see a hair regrowth specialist who can create you a personalized hair regrowth program based on your DNA and who is equiped to assess and treat you based on whether you are an aromatizer (person who converts testosterone over to estrogen) or not.
Best of luck!

Finasteride blocks 5 alpha reductase (an enzyme that is a hormone converter), so it indirectly affects several hormones "upstream" including testosterone, DHEA, and estrogen, while reducing DHT "downstream."  The upstream effects are transient - which means that the body has feedback mechanisms that keep the hormone levels  within normal levels.  
Topical finasteride is not as well studied and does not have as reliable efficacy, mostly due to the variable absorption in the scalp (which has a lot of oil glands).  Other "DHT blockers" (which actually target 5 alpha reductase) like dutasteride have similar and sometimes more profound effects.

Propecia does increase estrogen levels by 13-15%. DHT Blockers do have side effects that may affect the reproductive organs as well.

Finasteride does increase estrogen - by 13 %. We don't yet have comparative data on how well topical finasteride works.