IDEAS home Printed from https://ideas.repec.org/p/ags/ndtr04/208269.html
   My bibliography  Save this paper

Transport Capacity, Price Gaps, and the Economic Return: A Unique Natural Experiment in China

Author

Listed:
  • Li, Zhigang

Abstract

The goal of this study is to improve upon the existing literature in quantifying the economic return of transportation infrastructure. Specifically, I propose incorporating the changes of between-city price gaps to approximate economic benefits that have been omitted by the current literature. Identifying the causal impact of new infrastructure on price gaps is complicated. To circumvent this problem, I propose to employ empirical settings in which natural experiments can be constructed to eliminate the effects of confounding factors. In particular, I consider two cities in northwestern China; they are connected by a railroad, the capacity of which was doubled in my sample period (1993-1996). I find strong evidences suggesting that increasing the railroad capacity significantly decreased price gaps. The change in price gaps implies a real economic return of between 12% and 24% per year.

Suggested Citation

  • Li, Zhigang, 2004. "Transport Capacity, Price Gaps, and the Economic Return: A Unique Natural Experiment in China," 45th Annual Transportation Research Forum, Evanston, Illinois, March 21-23, 2004 208269, Transportation Research Forum.
    • Handle: RePEc:ags:ndtr04:208269
    DOI: 10.22004/ag.econ.208269
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/208269/files/2004_TransportCapacity_paper.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.208269?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    2. Peter D. McClelland, 1972. "Social Rates of Return on American Railroads in the Nineteenth Century," Economic History Review, Economic History Society, vol. 25(3), pages 471-488, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Zhigang & Chen, Yu, 2013. "Estimating the social return to transport infrastructure: A price-difference approach applied to a quasi-experiment," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 669-683.
    2. Shahbaz, Muhammad & Hoang, Thi Hong Van & Mahalik, Mantu Kumar & Roubaud, David, 2017. "Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis," Energy Economics, Elsevier, vol. 63(C), pages 199-212.
    3. Ingrid Ott & Stephen J. Turnovsky, 2006. "Excludable and Non‐excludable Public Inputs: Consequences for Economic Growth," Economica, London School of Economics and Political Science, vol. 73(292), pages 725-748, November.
    4. repec:lrk:lrkwkp:fiirs016 is not listed on IDEAS
    5. Ali,Rubaba & Barra,Alvaro Federico & Berg,Claudia N. & Damania,Richard & Nash,John D. & Russ,Jason Daniel & Ali,Rubaba & Barra,Alvaro Federico & Berg,Claudia N. & Damania,Richard & Nash,John D. & Russ, 2015. "Transport infrastructure and welfare : an application to Nigeria," Policy Research Working Paper Series 7271, The World Bank.
    6. David Owyong & Shandre Thangavelu, 2001. "An empirical study on public capital spillovers from the USA to Canada," Applied Economics, Taylor & Francis Journals, vol. 33(11), pages 1493-1499.
    7. Conrad, Klaus & Seitz, Helmut, 1997. "Infrastructure provision and international market share rivalry," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 715-734, November.
    8. Ingrid Ott & Susanne Soretz, 2006. "Governmental activity, integration, and agglomeration," Working Paper Series in Economics 57, University of Lüneburg, Institute of Economics.
    9. Schreiner, Lena & Madlener, Reinhard, 2022. "Investing in power grid infrastructure as a flexibility option: A DSGE assessment for Germany," Energy Economics, Elsevier, vol. 107(C).
    10. Feng, Qu & Wu, Guiying Laura, 2018. "On the reverse causality between output and infrastructure: The case of China," Economic Modelling, Elsevier, vol. 74(C), pages 97-104.
    11. Raffaello Bronzini & Paolo Piselli, 2006. "Determinants of long-run regional productivity: the role of R&D, human capital and public infrastructure," Temi di discussione (Economic working papers) 597, Bank of Italy, Economic Research and International Relations Area.
    12. Yoshiyasu Ono, 2011. "The Keynesian Multiplier Effect Reconsidered," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(4), pages 787-794, June.
    13. Zhenhua Chen & Kingsley Haynes, 2015. "Multilevel assessment of public transportation infrastructure: a spatial econometric computable general equilibrium approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(3), pages 663-685, May.
    14. Wang, Xu & Zhang, Xiaobo & Xie, Zhuan & Huang, Yiping, 2016. "Roads to innovation: Firm-level evidence from China:," IFPRI discussion papers 1542, International Food Policy Research Institute (IFPRI).
    15. Kim, Hyungtai & Ahn, Sanghoon & Ulfarsson, Gudmundur F., 2021. "Impacts of transportation and industrial complexes on establishment-level productivity growth in Korea," Transport Policy, Elsevier, vol. 100(C), pages 89-97.
    16. Haughwout, Andrew F., 1998. "Aggregate Production Functions, Interregional Equilibrium, and the Measurement of Infrastructure Productivity," Journal of Urban Economics, Elsevier, vol. 44(2), pages 216-227, September.
    17. Josh Ryan-Collins, 2015. "Is Monetary Financing Inflationary? A Case Study of the Canadian Economy, 1935-75," Economics Working Paper Archive wp_848, Levy Economics Institute.
    18. Achim Truger, 2015. "Implementing the golden rule for public investment in Europe," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 138, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    19. Andreas Stephan, 1997. "The Impact of Road Infrastructure on Productivity and Growth: Some Preliminary Results for the German Manufacturing Sector," CIG Working Papers FS IV 97-47, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    20. Kenneth Button & Junyang Yuan, 2013. "Airfreight Transport and Economic Development: An Examination of Causality," Urban Studies, Urban Studies Journal Limited, vol. 50(2), pages 329-340, February.
    21. Urrunaga, Roberto & Aparicio, Carlos, 2012. "Infrastructure and economic growth in Peru," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ndtr04:208269. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://trforum.org/annual-forum/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.