Geoscience Reference
In-Depth Information
Transportation (0.042)
Public road
(0.020) 49%
Public air transportation
(0.014) 33%
Public water transportation
(0.005) 13%
Public transit
(0.002) 5%
Fig. 10.4
Economic contributions of transportation infrastructure by mode in the US.
Note
: The
values are obtained from separate simulations based on the condition that each mode of transpor-
tation capital increases by 10 %. The percentage indicates the share of contribution from the
individual mode. Economic outputs are measured by the variations in value added GDP and/or
household income
household income. In terms of the modal influences, the economic impacts vary
significantly by modes. For instance, a 10 % increase of public capital in the truck
sector, in other words, a 10 % increase of highway and street capital is associated
with a 0.02 % increase in both the value added to GDP and to household income in
2007,
ceteris paribus
. Assuming a 10 % increase of public capital in air transport-
ation sector, the US value added to GDP and household income are likely to
increase by 0.014 %,
ceteris paribus
. Compared to truck and air sectors, the
economic impacts of public capital in transit and water transportation sectors are
much smaller. A 10 % increase of public capital in transit and water transportation
sectors are associated with only a 0.002 and a 0.005 % increase in value added to
GDP and to household income respectively,
ceteris paribus
. The comparison
clearly indicates that public capital in highway and streets has the over whelming
impact on growth of GDP and household income among the four public transport-
ation modes. The relative economic contributions among the four modes of public
transportation are illustrated in Fig.
10.4
.
The results of welfare impact of public transportation infrastructure are similar
to its economic impacts. Welfare effect in the study is measured by equivalent
variation (EV), which is defined as “the income change at current prices that would
be equivalent to the proposed change in the new equilibrium in terms of its impact
on utility” (Varian
1992
, 161). A positive value of the EV indicates a welfare gain
and vice versa. Table
10.3
indicates that the increase of public capital in highways
and streets generates the highest welfare gain. Public capital of air transportation
has the second largest impact on welfare generation. Public water transportation
and public transit still rank third and fourth in terms of their impact on welfare,
respectively.
To assess whether spatial dependence has influence on the result of impact
analysis is another task of the study. To achieve this goal, CGE simulation results
of the two scenarios that adopt substitution elasticities from OLS and spatial
econometric estimations are compared. Table
10.4
displays the estimation ratios
of SECGE and traditional CGE. The ratio is calculated using the difference of CGE
results based on the spatial econometric estimations and OLS estimation divided by
the result of corresponding OLS estimation. The ratio indicates the magnitude of
difference between traditional CGE and SECGE. For instance, a ratio of zero
