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General Equilibrium (SECGE), which integrates both spatial econometrics with
equilibrium modeling to improve the effectiveness of impact analysis. We apply
this new method to transportation infrastructure.
This study differs from previous studies in the following three aspects: First,
through a spatial autocorrelation test, the presence of spatial dependence is
observed and confirmed among the elasticities of factor substitution in the US. To
deal with spatial dependence, spatial panel econometric techniques are introduced
to estimate the elasticity of factor substitution of different sectors for the Constant
Elasticity of Substitution (CES) production function with consideration of spatial
direct and indirect effects.
Second, transportation impact analysis is conducted under different scenarios in
a general equilibrium framework. Unlike partial equilibrium analysis, general
equilibrium analysis allows researchers to obtain a more comprehensive under-
standing of transportation infrastructure's impacts given its consideration of
interactions between demand and supply. The study validates the method by
comparing traditional equilibrium simulation without controlling for spatial depen-
dence and the new equilibrium simulation with consideration of spatial depen-
dence. The comparison allows researchers to appreciate the spatial impacts of
transportation infrastructure.
Third, the study is conducted with a focus on multimodal transportation systems
that includes: road, rail, air, public transit, pipeline and water. Unlike a unimodal
perspective, this multimodal perspective is essential to achieve a comprehensive
understanding of the investment impacts in the transportation infrastructure system
as a whole. It also enables us to compare impacts and their spillovers between
different types of infrastructure and understand the relative importance of transport-
ation investment by mode.
The rest of this paper is organized as follow. Section
10.2
lays a theoretical
foundation for the study from relevant literature. Section
10.3
discusses the CGE
structure. The modeling procedure is discussed in Sect.
10.4
. Section
10.5
introduces the data and Sect.
10.6
presents simulation results, which is followed
by a conclusion in Sect.
10.7
.
10.2
Literature Review
The literature regarding economic impacts of transportation infrastructure can be
reviewed from three fields based on the different analytical approaches: the tradi-
tional econometric approach, a spatial perspective and the general equilibrium
approach. Further, the necessity for a multimodal investigation is also reviewed.
10.2.1 Traditional Econometric Approach
Since a series of papers by Aschauer (
1989
,
1990
,
1994
) argued that enhancing
public infrastructure expenditure facilitated region achieving its economic
