Spatial Equilibrium Models: A Survey with Special Emphasis on Transportation

Although both transportation science and economics have generated a wealth of formal models to address compelling policy questions, there seems to be a no-man’s land of transport-economy interactions that has seen relatively little maturation in terms of modelling. The aim of this paper is to focus on suitable models for estimating the spatial and economic effects — economy-wide, regional or national, but preferably multisector — caused by transport policies as well as by (autonomous) changes in the transport sector. A main motivation for the focus here on specific approaches — oriented towards notions of market mechanisms, rational behaviour and equilibrium — is the belief that the scope for sectoral interactions depends, among other things, upon transportation costs, which are variable and affected by a number of factors, such as production technology, input structure, density factors and congestion phenomena. This means that any policy aimed at influencing transportation conditions may have a non-negligible economy-wide effect, in terms of impacts on national income, prices, sectoral distribution of factors and production as well as on spatial commodity and passenger flows. The call nowadays for curbing the negative external effects of road, rail and air traffic, causing environmental damage, health risks, accidents and congestion (time losses), indicates that we may have to face significant alterations with respect to transportation. It is evident then that tools are required for analysing economy-wide effects of transportation (scenarios) and transport policies, in particular those connected to commodity flows, sectoral performance, employment, and public transport.