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Regional Science Matters pp 163–186Cite as

Spatial Impact of Transportation Infrastructure: A Spatial Econometric CGE Approach

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Abstract

This study introduces a new method called Spatial Econometric Computable General Equilibrium (SECGE), which integrates both spatial econometrics with computable general equilibrium modeling to improve the effectiveness of impact analysis on transportation infrastructure. Elasticities of factor substitution for the Constant Elasticity Substitution (CES) production function are estimated in a spatial econometric model with consideration of spatial dependence. CGE simulations adopting different substitution elasticities show a difference between spatial econometric estimation and traditional OLS estimation. Although the differences are relatively small in this aggregate case study, implications for more sensitive disaggregated regional models are clear.

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Notes

  1. 1.

    Public capital stock is normally estimated through the Perpetual Inventory Method based on the level of depreciation rate and level of investment. The linkage can be written as K t  = (1 − δ)K t − 1 + I t . Given the predetermined ratio of depreciation rate δ, capital stock is naturally primarily influenced by the investment level.

  2. 2.

    Because there is no specific information on public transportation capital by mode except the highway and streets, the public capital shares for air, transit and water transportation have to be estimated based on their activity share.

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Authors and Affiliations

  1. School of Public Policy, George Mason University, Arlington, VA, 22201, USA

    Zhenhua Chen & Kingsley E. Haynes

Authors
  1. Zhenhua Chen
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  2. Kingsley E. Haynes
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Correspondence to Zhenhua Chen .

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Editors and Affiliations

  1. Department of Spatial Economics, VU University, Amsterdam, The Netherlands

    Peter Nijkamp

  2. University of Southern California Price School of Public Policy, Los Angeles, California, USA

    Adam Rose

  3. VU University Department of Spatial Economics, Amsterdam, The Netherlands

    Karima Kourtit

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Chen, Z., Haynes, K.E. (2015). Spatial Impact of Transportation Infrastructure: A Spatial Econometric CGE Approach. In: Nijkamp, P., Rose, A., Kourtit, K. (eds) Regional Science Matters. Springer, Cham. https://doi.org/10.1007/978-3-319-07305-7_10

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