In this paper, the author examines the geographic distribution of transportation investments as well as the question of who pays for the investments in the Philadelphia metropolitan area, focusing on differences between the city and its surrounding Pennsylvania suburban counties. The author presents estimates of total, per capita, and per user benefits of highway investments, as well as fees generated by highway users at the county level. The author also examines the combined highway and transit investments in the suburbs as a whole and in the city. ; There are three central findings in this analysis: (1) Highway capital expenditures in the Greater Philadelphia region are significantly higher on a per capita basis in the Pennsylvania suburbs than in the city of Philadelphia. Over the 10 years from 1986-1995, expenditures benefiting suburban residents are estimated to be $1041 per capita, about 2.5 times as large as those benefiting city residents, which were $424 per capita. (2) Total highway user fees generated differ significantly across communities because of different auto ownership rates. Users fees do not, however, have differential effects on the attractiveness of communities because the user fees that individual drivers pay are the same across communities. (3) The per user differences between Philadelphia and its suburbs are smaller than per capita differences. Per user differences affect the degree to which car travel is favored in the city versus the suburbs, but it does not capture the location effects of investment in transportation infrastructure. ; The difference in per capita expenditures is likely to have a significant effect on the competitive position of the city of Philadelphia relative to its suburbs. Highway investments have provided an economically significant, although not overwhelming, incentive for suburban rather than city locations for people and firms. The author estimates that the highway investment differential reduces employment in the city by about 40,000 jobs.
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Paper provided by Federal Reserve Bank of Philadelphia in its series Working Papers with number
98-7.
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