Abstract
Impact assessment of transportation investment policy is a challenging task as assessment outcome is sensitive to various attributes such as methodology, time period, scale and location of analysis. This study is conducted to evaluate regional impact of public transportation infrastructure in the USA at multilevel geographic scales. The assessment is implemented using a spatial econometric computable general equilibrium approach which integrates spatial econometric techniques with computable general equilibrium models to control for spatial spillover effects. The results found that regional economic impacts of public transportation infrastructure vary substantially by mode and geographic scale. The US highway infrastructure tends to have consistent and dominant impacts on both the US national and regional economy across different geographic scales. The impact of public airport infrastructure tends to be much larger at the national level than state and metropolitan level, whereas the economic contribution of public transit including passenger rail infrastructure tends to be much stronger at the US northeast metro level than the national level of analysis.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
In modern regional science, the juxtaposition of econometric and another form of model often implies that the latter is infused with a forecasting capability (as in the terminology such as conjoined input/output-econometric model). It should be pointed out that this is not the meaning in the case of the SECGE model presented in this study.
US Bureau of Economic Analysis does not release confidential information such as wage, rental, employment and output by sectors at the metropolitan statistical area level to public due to the concern of private sector confidentiality and national security, which can be compromised by low sample size.
Public transportation infrastructure in the USA includes highway, airport, port, public transit and public passenger rail. Although many states have highway, airport, port and public transit, public passenger rail infrastructure (owned by the National Passenger Railway Corporation, Amtrak) is primarily located in the northeast states.
IMPLAN was originally an input–output model developed by the Forest Service of the U.S. Department of Agriculture (U.S. Forest Service 1992). It was later developed into a comprehensive economic impact modeling system including both an immense database and algorithms for creating regional I–O models and is currently operated by Minnesota IMPLAN Group (MIG).
Walras’s law is a principle in general equilibrium theory, which indicates that any specific market must be in equilibrium if all other markets in an economy reach equilibrium. In the CGE practice, it requires the modeling system to be square (the number of variables must equal number of equations so as to reach a solution). A slack WALRAS variable is created to secure the model satisfy the law.
Infrastructure improvement here does not mean expanding the existing infrastructure network by relying on a large amount of investment. Instead, it only indicates the improvement in terms of capacity and quality of the existing infrastructure systems through a relative small scale of investment on projects such as adding a new lane, improving pavement.
References
Anselin L, Griffith DA (1988) Do spatial effects really matter in regression analysis? Pap Reg Sci 65(1):11–34
Anselin Luc, Syabri Ibnu, Kho Youngihn (2006) GeoDa: an introduction to spatial data analysis. Geograph Anal 38(1):5–22
Armington Paul S (1969) A theory of demand for products distinguished by place of production. Staff Papers Int Monet Fund 16(1):159–178
Aschauer DA (1989) Is public expenditure productive? J Monet Econ 23(2):177–200
Aschauer DA (1990) Why is infrastructure important? Conference series, proceedings (pp. 21–68). Federal Reserve Bank of Boston
Aschauer DA (1994) Infrastructure and macroeconomic performance: direct and indirect effects. Presented at the Paper to OECD conference on capital formation and employment, Amsterdam
Balistreri EJ, McDaniel CA, Wong EV (2003) An estimation of U.S. Industry-level capital-labor substitution. EconWPA. computational economics
Bhatta SD, Drennan MP (2003) The economic benefits of public investment in transportation. J Plan Educt Res 22(3):288–296
Boarnet MG (1997) Infrastructure services and the productivity of public capital: the case of streets and highways. Nat Tax J 50(1):39–57
Boarnet Marlon G (1998) Spillovers and the locational effects of public infrastructure. J Reg Sci 38(3): 381–400
Boarnet Marlon G, Haughwout AF (2000) Do highways matter? Evidence and policy implications of highways’ influence on metropolitan development. A discussion paper prepared for the brookings institution center on urban and metropolitan policy. Washington D.C
Chen Z, Haynes K (2013) Transportation capital in the US: a multimodal general equilibrium analysis, public works management and policy
Chen Z, Haynes K (2014a) Public surface transportation and regional output: a spatial panel approach, papers in regional science
Chen Z, Haynes K (2014b) Spatial impact of transportation infrastructure: a spatial econometric CGE approach. In: Rose Adam, Nijkamp Peter (eds) Regional science matters: studies dedicated to Walter Isard. Springer, Berlin
Cliff AD, Ord JK (1981) Spatial processes: models & applications. Pion
Cohen JP (2007) Economic benefits of investments in transport infrastructure. Discussion Paper No. 2007–13 Dec 2007. OECD/ITF
Cohen JP, Morrison Paul Catherine J (2003) Spatial and supply/demand agglomeration economies: state- and industry-linkages in the U.S. food system. Empir Econ 28:733–751
Cohen JP, Morrison Paul Catherine J (2004) Public infrastructure investment, interstate spatial spillovers, and manufacturing costs. Rev Econ Stat 86(2):551–560
Duffy-Deno KT, Eberts R (1991) Public infrastructure and regional economic development: a simultaneous equations approach. J Urban Econ 30(3):329–343
Elhorst JP (2014) Matlab software for spatial panels. Int Reg Sci Rev 37(3):389–405
Fernald JG (1999) Roads to prosperity? Assessing the link between public capital and productivity. Am Econ Rev 89(3):619–638
Harmatuck DJ (1996) The influence of transportation infrastructure on economic development. Logist Trans Rev 32(1):63–76
Hayes RH, Garvin DA (1982) Managing as if tomorrow mattered. Harvard Bus Rev 78:70–76
Holtz-Eakin D, Schwartz AE (1995) Spatial productivity spillovers from public infrastructure: evidence from state highways (Working Paper No. 5004). National Bureau of Economic Research
Jiwattanakulpaisarn P, Noland RB, Graham DJ, Polak JW (2009) Highway infrastructure and state-level employment: a causal spatial analysis. Papers Reg Sci 88(1):133–159
Kelejian HH, Robinson DP (1997) Infrastructure productivity estimation and its underlying econometric specifications: a sensitivity analysis. Papers Reg Sci 76(1):115–131
LeSage J, Pace RK (2009) Introduction to spatial econometrics, 1st edn. Chapman and Hall/CRC, UK
Mattoon R (2002) Midwest infrastructure: Assessing the contribution of basic infrastructure to economic growth. Chicago Fed Letter, 184b (Special Issue December)
McDonald Scott (2005) The PROVIDE Project standard computable general equilibrium model: Version 2. Technical Paper Series 15625, PROVIDE Project
Moran PAP (1950) Notes on continuous stochastic phenomena. Biometrika 37(1–2):17–23
Munnell AH (1990) Why has productivity growth declined? Productivity and public investment. New Engl Econ Rev 30:3–22
Munnell Alicia H (1992) Policy watch: infrastructure investment and economic growth. J Econ Perspect 6(4):189–198
Munnell A, Cook LM (1990) How does public infrastructure affect regional economic performance? New Engl Econ Rev 11–33
Nadiri MI, Mamuneas TP (1996) Contribution of Highway capital to industry and national productivity growth (No. BAT-94-008). Report prepared for apogee research inc, for the federal highway administration office of policy development
Ozbay K, Ozmen-Ertekin D, Berechman J (2007) Contribution of transportation investments to county output. Transp Policy 14(4):317–329
Paelinck JHP, Klaassen LH (1979) Spatial econometrics. Saxon House, Farnborough
Shatz HJ, Kitchens KE, Rosenbloom S (2011) Highway infrastructure and the economy: implications for federal policy. Rand Corporation, Santa Monica
Shinnar R, Dressler O, Feng CA, Avidan AI (1989) Estimation of the economic rate of return for industrial companies. J Bus, 417–445
Solomon E (ed) (1959) The management of corporate capital. University of Chicago, Graduate School of Business, Chicago
U.S. Forest Service (1992) Micro IMPLAN user’s guide. Version 91-F
Varian Hal R (1992) Microecon analysis, 3rd edn. Norton & Company, New York
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Chen, Z., Haynes, K.E. Multilevel assessment of public transportation infrastructure: a spatial econometric computable general equilibrium approach. Ann Reg Sci 54, 663–685 (2015). https://doi.org/10.1007/s00168-015-0671-3
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00168-015-0671-3