The Wider Economic Benefits of Transport

Macro-, Meso- and Micro-Economic Transport Planning and Investment Tools

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The standard cost-benefit analysis of transport infrastructure investment projects weighs a project’s costs against users’ benefits. This approach has been challenged on the grounds that it ignores wider economic impacts of such projects. At this International Transport Forum Round Table, leading academics and practitioners addressed these concerns and examined a range of potential approaches for evaluating wider impacts – negative as well as positive. They concluded that for smaller projects, it is better to focus on timely availability of results, even if this means forgoing sophisticated analysis of wider impacts. For larger projects or investment programs, customized analysis of these effects is more easily justifiable. Creating consistent appraisal procedures is a research priority.

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Transport Infrastructure inside and across Urban Regions

Models and Assessment Methods

International Transport Forum

Infrastructure investment represents large capital values, whereas the benefits and other consequences are extended into the future. This makes methods to assess investment plans an important issue. This paper develops a framework in which infrastructure networks are interpreted as determinants of the spatial organisation of an economy, while the very same organisation is assumed to influence the growth of functional urban regions (FUR) and thereby the entire economy. The suggested framework is formulated so as to facilitate the modeling of agglomeration economies, and hence to separate intra-regional and interregional transport flows. A basic argument is that transport networks should preferably be described by their (physical) attributes, and several accessibility measures are presented as tools in this effort. This type of accessibility measures combine information about time distances between nodes in an FUR and the corresponding location pattern. The attempts to estimate aggregate production functions and associated dual forms is assessed in view of the so-called new growth theory are discussed, and it is concluded that this approach has been more successful when cross-regional data are employed in combination with infrastructure measures that reflect attributes. The discussion of macro approaches is followed by a detailed presentation of how accessibility measures can depict the spatial organisation of FURs and the urban areas inside an FUR. Such measures are candidates as explanatory variables in macro models, although the presentation concentrates on applications in commuting models, and sector growth models. In particular, the paper presents a model in which an individual urban area’s accessibility to labour supply interact with the same area’s accessibility to jobs, in the context of an FUR. Empirical results from Sweden are used to illustrate how the spatial organisation and its change is influenced by the inter-urban networks of urban areas in an FUR. It is also argued that the model is capable of depicting essential aspects of recent contributions to the economics of agglomeration.

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