[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/hhs/ctswps/2017_003.html
   My bibliography  Save this paper

Cost-benefit analysis of transport improvements in the presence of spillovers, matching and an income tax

Author

Listed:
Abstract
This paper addresses the problem of measuring the welfare benefits of a transport improvement. We formulate and analyze a rich spatial model that allows for spillovers, matching and income tax, in a setting with multiple work and residential locations and very general worker heterogeneity. The conventional consumer surplus captures part of the benefits and is calculated based on predictions of changes in travel demand and transport costs. The issue is to determine which socalled wider impacts to add to this. We find that adding the change in total output as a wider impact leads to doublecounting of benefits. The output change due to spillovers should be added, while the output change due to matching is already partly included in the consumer surplus. These results are useful for applied costbenefit analysis of transport policies.

Suggested Citation

  • Eliasson, Jonas & Fosgerau, Mogens, 2017. "Cost-benefit analysis of transport improvements in the presence of spillovers, matching and an income tax," Working papers in Transport Economics 2017:3, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    • Handle: RePEc:hhs:ctswps:2017_003
    as

    Download full text from publisher

    File URL: http://www.transportportal.se/swopec/CTS2017-3.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ciccone, Antonio, 2002. "Agglomeration effects in Europe," European Economic Review, Elsevier, vol. 46(2), pages 213-227, February.
    2. Giulia Carra & Ismir Mulalic & Mogens Fosgerau & Marc Barthelemy, 2016. "Modeling the relation between income and commuting distance," Papers 1602.01578, arXiv.org, revised May 2016.
    3. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    4. Kenneth A. Small & Kurt Van Dender, 2007. "Fuel Efficiency and Motor Vehicle Travel: The Declining Rebound Effect," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 25-52.
    5. Rice, Patricia & Venables, Anthony J. & Patacchini, Eleonora, 2006. "Spatial determinants of productivity: Analysis for the regions of Great Britain," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 727-752, November.
    6. Fosgerau, Mogens & McFadden, Daniel & Bierlaire, Michel, 2010. "Choice probability generating functions," MPRA Paper 24214, University Library of Munich, Germany.
    7. Starrett, David, 1978. "Market allocations of location choice in a model with free mobility," Journal of Economic Theory, Elsevier, vol. 17(1), pages 21-37, February.
    8. Ninette Pilegaard & Mogens Fosgerau, 2008. "Cost Benefit Analysis of a Transport Improvement in the Case of Search Unemployment," Journal of Transport Economics and Policy, University of Bath, vol. 42(1), pages 23-42, January.
    9. Kidokoro, Yukihiro, 2006. "Benefit estimation of transport projects--a representative consumer approach," Transportation Research Part B: Methodological, Elsevier, vol. 40(7), pages 521-542, August.
    10. Daniel Graham & Kurt Dender, 2011. "Estimating the agglomeration benefits of transport investments: some tests for stability," Transportation, Springer, vol. 38(3), pages 409-426, May.
    11. Yukihiro Kidokoro, 2004. "Cost-Benefit Analysis for Transport Networks: Theory and Application," Journal of Transport Economics and Policy, University of Bath, vol. 38(2), pages 275-307, May.
    12. Calthrop, Edward & De Borger, Bruno & Proost, Stef, 2010. "Cost-benefit analysis of transport investments in distorted economies," Transportation Research Part B: Methodological, Elsevier, vol. 44(7), pages 850-869, August.
    13. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
    14. Kanemoto, Yoshitsugu, 2013. "Second-best cost–benefit analysis in monopolistic competition models of urban agglomeration," Journal of Urban Economics, Elsevier, vol. 76(C), pages 83-92.
    15. repec:hal:spmain:info:hdl:2441/1kv8mtgl748r0ahh12air9erdc is not listed on IDEAS
    16. Ottaviano, Gianmarco & Thisse, Jacques-Francois, 2004. "Agglomeration and economic geography," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 58, pages 2563-2608, Elsevier.
    17. Anthony J. Venables, 2007. "Evaluating Urban Transport Improvements: Cost-Benefit Analysis in the Presence of Agglomeration and Income Taxation," Journal of Transport Economics and Policy, University of Bath, vol. 41(2), pages 173-188, May.
    18. Börjesson, Maria & Eliasson, Jonas, 2014. "Experiences from the Swedish Value of Time study," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 144-158.
    19. Maré, David C. & Graham, Daniel J., 2013. "Agglomeration elasticities and firm heterogeneity," Journal of Urban Economics, Elsevier, vol. 75(C), pages 44-56.
    20. Patricia C. Melo & Daniel J. Graham, 2014. "Testing for labour pooling as a source of agglomeration economies: Evidence for labour markets in England and Wales," Papers in Regional Science, Wiley Blackwell, vol. 93(1), pages 31-52, March.
    21. Daniel J. Graham & Patricia S. Melo & Piyapong Jiwattanakulpaisarn & Robert B. Noland, 2010. "Testing For Causality Between Productivity And Agglomeration Economies," Journal of Regional Science, Wiley Blackwell, vol. 50(5), pages 935-951, December.
    22. Diego Puga, 2010. "The Magnitude And Causes Of Agglomeration Economies," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 203-219, February.
    23. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2008. "Spatial wage disparities: Sorting matters!," Journal of Urban Economics, Elsevier, vol. 63(2), pages 723-742, March.
    24. Daniel J. Graham, 2007. "Agglomeration, Productivity and Transport Investment," Journal of Transport Economics and Policy, University of Bath, vol. 41(3), pages 317-343, September.
    25. Gerard de Jong & Hugh Gunn, 2001. "Recent Evidence on Car Cost and Time Elasticities of Travel Demand in Europe," Journal of Transport Economics and Policy, University of Bath, vol. 35(2), pages 137-160, May.
    26. Tom Worsley, 2011. "The Evolution of London's Crossrail Scheme and the Development of the Department for Transport's Economic Appraisal Methods," International Transport Forum Discussion Papers 2011/27, OECD Publishing.
    27. Graham, Daniel J., 2007. "Variable returns to agglomeration and the effect of road traffic congestion," Journal of Urban Economics, Elsevier, vol. 62(1), pages 103-120, July.
    28. Mohring, Herbert, 1993. "Maximizing, measuring, and not double counting transportation-improvement benefits: A primer on closed- and open-economy cost-benefit analysis," Transportation Research Part B: Methodological, Elsevier, vol. 27(6), pages 413-424, December.
    29. J. V. Henderson & J. F. Thisse (ed.), 2004. "Handbook of Regional and Urban Economics," Handbook of Regional and Urban Economics, Elsevier, edition 1, volume 4, number 4.
    30. Kanemoto, Yoshitsugu, 2013. "Evaluating benefits of transportation in models of new economic geography," Economics of Transportation, Elsevier, vol. 2(2), pages 53-62.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mustafa Hamurcu & Tamer Eren, 2020. "Strategic Planning Based on Sustainability for Urban Transportation: An Application to Decision-Making," Sustainability, MDPI, vol. 12(9), pages 1-24, April.
    2. Andersson, Henrik & Hultkrantz, Lars & Lindberg, Gunnar & Nilsson, Jan-Eric, 2017. "The role of economic analysis for investment priorities in Sweden’s transport sector," Working papers in Transport Economics 2017:12, CTS - Centre for Transport Studies Stockholm (KTH and VTI), revised 23 May 2018.
    3. Eliasson, Jonas & Savemark, Christian & Franklin, Joel, 2020. "The impact of land use effects in infrastructure appraisal," Transportation Research Part A: Policy and Practice, Elsevier, vol. 141(C), pages 262-276.
    4. Börjesson, Maria & Isacsson, Gunnar & Andersson, Matts & Anderstig, Christer, 2018. "Agglomeration, productivity and the role of transport system improvements," Working papers in Transport Economics 2018:16, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    5. Knudsen, Elias Stapput & Hjorth, Katrine & Pilegaard, Ninette, 2022. "Wages and accessibility – Evidence from Denmark," Transportation Research Part A: Policy and Practice, Elsevier, vol. 158(C), pages 44-61.
    6. Xuto, Praj & Bansal, Prateek & Anderson, Richard J. & Graham, Daniel J. & Hörcher, Daniel & Barron, Alexander, 2023. "Examining the impacts of capital investment in London’s Underground: A long-term analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 175(C).
    7. Graham, Daniel J. & Gibbons, Stephen, 2019. "Quantifying Wider Economic Impacts of agglomeration for transport appraisal: Existing evidence and future directions," Economics of Transportation, Elsevier, vol. 19(C), pages 1-1.
    8. Asplund, Disa & Pyddoke, Roger, 2020. "Optimal fares and frequencies for bus services in a small city," Research in Transportation Economics, Elsevier, vol. 80(C).
    9. Gómez-Lobo, Andrés & Micco, Alejandro, 2023. "Urban commuting time and sick-leave medical license use: An empirical study of Santiago, Chile," Economics of Transportation, Elsevier, vol. 33(C).
    10. Holmgren, Johan, 2020. "The effect of public transport quality on car ownership – A source of wider benefits?," Research in Transportation Economics, Elsevier, vol. 83(C).
    11. Riukula, Krista & Väänänen, Touko, 2024. "Estimating the Labour Market Impacts of Transport Projects in Finland," ETLA Working Papers 120, The Research Institute of the Finnish Economy.
    12. Seyed Mahdi Miraftabzadeh & Babak Ranjgar & Alessandro Niccolai & Michela Longo, 2024. "Comparative Analysis of Sustainable Electrification in Mediterranean Public Transportation," Sustainability, MDPI, vol. 16(7), pages 1-24, March.
    13. Berry, Carl & Börjesson, Maria, 2024. "Income and fuel price elasticities of car use on micro panel data," Energy Economics, Elsevier, vol. 135(C).
    14. Tscharaktschiew, Stefan, 2020. "Why are highway speed limits really justified? An equilibrium speed choice analysis," Transportation Research Part B: Methodological, Elsevier, vol. 138(C), pages 317-351.
    15. Yixi Xue & Yi Zhang & Yi Chen, 2019. "An Evaluation Framework for the Planning of Electric Car-Sharing Systems: A Combination Model of AHP-CBA-VD," Sustainability, MDPI, vol. 11(20), pages 1-22, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Graham, Daniel J. & Gibbons, Stephen, 2019. "Quantifying Wider Economic Impacts of agglomeration for transport appraisal: Existing evidence and future directions," Economics of Transportation, Elsevier, vol. 19(C), pages 1-1.
    2. Börjesson, Maria & Isacsson, Gunnar & Andersson, Matts & Anderstig, Christer, 2018. "Agglomeration, productivity and the role of transport system improvements," Working papers in Transport Economics 2018:16, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    3. Ahlfeldt, Gabriel M. & Pietrostefani, Elisabetta, 2019. "The economic effects of density: A synthesis," Journal of Urban Economics, Elsevier, vol. 111(C), pages 93-107.
    4. Anderstig, Christer & Berglund, Svante & Eliasson, Jonas & Andersson, Matts & Pyddoke, Roger, 2012. "Congestion charges and labour market imperfections: “Wider economic benefits” or “losses”?," Working papers in Transport Economics 2012:4, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    5. Stef Proost & Jacques-François Thisse, 2019. "What Can Be Learned from Spatial Economics?," Journal of Economic Literature, American Economic Association, vol. 57(3), pages 575-643, September.
    6. Marion Drut & Aurélie Mahieux, 2014. "Correcting agglomeration economies: How air pollution matters," Working Papers hal-01007019, HAL.
    7. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    8. Daniel Graham & Kurt Dender, 2011. "Estimating the agglomeration benefits of transport investments: some tests for stability," Transportation, Springer, vol. 38(3), pages 409-426, May.
    9. Marion Drut & Aurélie Mahieux, 2017. "Correcting agglomeration economies: How air pollution matters," Papers in Regional Science, Wiley Blackwell, vol. 96(2), pages 381-400, June.
    10. Yoshitsugu Kanemoto, 2013. "Pitfalls in estimating “wider economic benefits” of transportation projects," GRIPS Discussion Papers 13-20, National Graduate Institute for Policy Studies.
    11. Tania Paola Torres-Gutiérrez & Ronny Correa-Quezada & María de la Cruz del Río-Rama & José Álvarez-García, 2020. "Location Decisions of New Manufacturing Firms in Ecuador. Agglomeration Mechanisms," Mathematics, MDPI, vol. 8(8), pages 1-24, August.
    12. Isacsson, Gunnar & Börjesson, Maria & Andersson, Matts & Anderstig, Christer, 2016. "The impact of accessibility on labor earnings," Working papers in Transport Economics 2015:18, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    13. Kanemoto, Yoshitsugu, 2013. "Second-best cost–benefit analysis in monopolistic competition models of urban agglomeration," Journal of Urban Economics, Elsevier, vol. 76(C), pages 83-92.
    14. Ana Maria Bonomi Barufi & Eduardo Amaral Haddad & Peter Nijkamp, 2016. "Industrial scope of agglomeration economies in Brazil," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(3), pages 707-755, May.
    15. Börjesson, Maria & Jonsson, R. Daniel & Lundberg, Mattias, 2014. "An ex-post CBA for the Stockholm Metro," Transportation Research Part A: Policy and Practice, Elsevier, vol. 70(C), pages 135-148.
    16. Ivaldi, Marc & Quinet, Emile & Ruiz Mejia, Celia, 2022. "Agglomeration Transport and Productivity: Evidence from Toulouse Metropolitan Area," TSE Working Papers 22-1385, Toulouse School of Economics (TSE).
    17. Jordy Meekes & Wolter H. J. Hassink, 2023. "Endogenous local labour markets, regional aggregation and agglomeration economies," Regional Studies, Taylor & Francis Journals, vol. 57(1), pages 13-25, January.
    18. Andersson, Matts & Dehlin, Fredrik & Jörgensen, Peter & Pädam, Sirje, 2015. "Wider economic impacts of accessibility: a literature survey," Working papers in Transport Economics 2015:14, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    19. Anas, Alex & Chang, Huibin, 2023. "Productivity benefits of urban transportation megaprojects: A general equilibrium analysis of «Grand Paris Express»," Transportation Research Part B: Methodological, Elsevier, vol. 174(C).
    20. Tanaka, Kiyoyasu & Hashiguchi, Yoshihiro, 2017. "Agglomeration economies in the formal and informal sectors : a Bayesian spatial approach," IDE Discussion Papers 666, Institute of Developing Economies, Japan External Trade Organization(JETRO).

    More about this item

    Keywords

    Agglomeration; Spillovers; Matching; Cost benefit analysis; Transport policy.;
    All these keywords.

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:ctswps:2017_003. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CTS (email available below). General contact details of provider: http://www.cts.kth.se/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.