Evaluating Transport Improvements in Spatial Equilibrium / Stephen J. Redding.

Format:

Book

Author/Creator:

Redding, Stephen J.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w33532.

NBER working paper series no. w33532

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2025.

Summary:

The recent development of quantitative urban models provides a new set of tools for evaluating transport improvements. Conventional cost-benefit analyses are typically undertaken in partial equilibrium. In contrast, quantitative urban models characterize the spatial distribution of economic activity within cities in general equilibrium. We compare evaluations of a transport improvement using conventional cost-benefit analysis, sufficient statistics approaches based on changes in market access, and model-based counterfactuals. We show that quantitative urban models predict a reorganization of economic activity within cities in response to a transport improvement, which can lead to substantial differences between the predictions of these three approaches for large changes in transport costs.

Notes:

February 2025.

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