Distributive effects of new highway infrastructure in the Netherlands: the role of network effects and spatial spillovers

Network effects and spatial spillovers are intrinsic impacts of transport infrastructure. Network effects imply that an improvement in a particular link in a network generates effects in many other elements of that network, while spillover effects can be defined as those impacts occurring beyond the regions where the actual transport investment is made. These two related effects entail a redistribution of impacts among regions, and their omission from road planning is argued to cause the systematic underestimation of the profitability of transport projects and therefore the public financing they require. However, traditional transport appraisal methodologies fail to consider network and spillover effects. In this study we focus on the spillover impacts of two highway sections planned in the city region of Eindhoven, located in the Dutch province of Noord-Brabant, a region with traffic congestion problems. The new road infrastructure will be financed mainly by national government, the province and the urban region of Eindhoven (‘Stadsregio Eindhoven’), which consists of 21 municipalities. We measure the benefits of the additional links in terms of travel time savings and the accompanying monetary gains. The results show that important spillovers occur in those municipalities close to the new links. The province of Noord-Brabant will benefit the most. We also found important spillovers in the province of Limburg. This latter province will benefit from reduced travel times without contributing financially to the establishment of the analysed new road links.