Geoscience Reference
In-Depth Information
non-transportation sectors do not have transportation capital. They solely depend on
transportation sectors for transport services. The second is that the original capital
account for truck transportation includes not only public capital in truck sectors, but
also highway and street public capital. Similarly the original capital accounts of air
transportation, transit and water transportation include not only public capital in
each sector, but also include public capital for all the relevant infrastructures of
each respective mode.
The assumptions are made based on the unique characteristics of the transport-
ation sectors. Capital inputs for truck transportation include not only privately owned
vehicles, trailers and relevant facilities, it also demands public capital such as the road
networks to produce a road transport service. Air and water transportation sectors are
similar. Capital stocks such as aircrafts and watercrafts are primarily privately owned
while airports, air traffic control, ports and seaport terminals are mostly publicly
owned. In other words, public transportation stocks are treated as factors for these
transportation sectors to produce transportation services.
10.7
Results
Policy simulations are conducted under two scenarios of general equilibrium. The
first scenario adopts CES elasticity of factor substitution from OLS estimation
while the second scenario adopts estimates from spatial econometric models. The
results of CES elasticity of factor substitution from the two estimations are
displayed in Table
10.2
.
The results show that the elasticities of factor substitution vary significantly across
different sectors. The rail sector has the lowest value of substitution elasticity while
the information sector has the highest. The comparison of OLS estimation and spatial
panel estimation indicates differences of substitution elasticities exist among differ-
ent sectors. For instance, the values for sectors of manufacture, utility and construc-
tion, truck, air, transit, water, pipeline, warehouse and information from the spatial
econometric estimation are relatively higher than from the OLS estimation. This may
imply the existence of positive spillover effects of factor substitution.
The spatial interactions of substitution elasticities are observed in the direct
effects and indirect effects (See Table
10.2
). Significant and positive indirect effects
are found in sectors of manufacture, utility and construction, truck, transit and
pipeline, which indicate that wage-rental ratios from adjacent regions have positive
impacts on the local region itself. The results further confirm the existence of spatial
dependence among these sectors.
To understand the total impacts of public transportation infrastructure as well as
the impacts of each mode, public capital of different modes are shocked sequen-
tially and respectively at the same level of a 10 % change. The impacts on welfare,
GDP value added, household income, domestic production of each sector are
simulated and compared,
ceteris paribus
.
The spatial impacts of different transportation modes are summarized in
Table
10.3
. The result shows that a 10 % increase shock of total public transport-
ation capital is associated with a 0.04 % increase in both GDP value added and
