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Transportation investments in the Philadelphia metropolitan area: who benefits? Who pays? And what are the consequences?

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  • Richard Voith

Abstract

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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Bibliographic Info

Paper provided by Federal Reserve Bank of Philadelphia in its series Working Papers with number 98-7.

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Date of creation: 1998
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Handle: RePEc:fip:fedpwp:98-7

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Keywords: Local transit ; Philadelphia (Pa.);

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References

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  1. Holtz-Eakin, Douglas & Schwartz, Amy Ellen, 1995. "Infrastructure in a structural model of economic growth," Regional Science and Urban Economics, Elsevier, vol. 25(2), pages 131-151, April.
  2. Richard Voith, 1991. "Transportation, Sorting and House Values," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(2), pages 117-137.
  3. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
  4. Hansen, Mark & Gillen, David & Dobbins, Allison & Huang, Yuanlin & Puvathingal, Mohnish, 1993. "The Air Quality Impacts of Urban Highway Capacity Expansion: Traffic Generation and Land Use Change," University of California Transportation Center, Working Papers qt6zz3k76c, University of California Transportation Center.
  5. Holtz-Eakin, Douglas, 1994. "Public-Sector Capital and the Productivity Puzzle," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 12-21, February.
  6. Haughwout, Andrew F., 1997. "Central city infrastructure investment and suburban house values," Regional Science and Urban Economics, Elsevier, vol. 27(2), pages 199-215, April.
  7. Peter Mieszkowski & Edwin S. Mills, 1993. "The Causes of Metropolitan Suburbanization," Journal of Economic Perspectives, American Economic Association, vol. 7(3), pages 135-147, Summer.
  8. Robert P. Inman, 1992. "Can Philadelphia escape its fiscal crisis with another tax increase?," Business Review, Federal Reserve Bank of Philadelphia, issue Sep, pages 5-20.
  9. McDonald, John F. & Osuji, Clifford I., 1995. "The effect of anticipated transportation improvement on residential land values," Regional Science and Urban Economics, Elsevier, vol. 25(3), pages 261-278, June.
  10. Rephann, Terance & Isserman, Andrew, 1994. "New highways as economic development tools: An evaluation using quasi-experimental matching methods," Regional Science and Urban Economics, Elsevier, vol. 24(6), pages 723-751, December.
  11. Garcia-Mila, Teresa & McGuire, Therese J., 1992. "The contribution of publicly provided inputs to states' economies," Regional Science and Urban Economics, Elsevier, vol. 22(2), pages 229-241, June.
  12. Richard Voith, 1989. "Unequal subsidies in highway investment: what are the consequences?," Business Review, Federal Reserve Bank of Philadelphia, issue Nov, pages 9-18.
  13. Alicia H. Munnell & Leah M. Cook, 1990. "How does public infrastructure affect regional economic performance?," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 11-33.
  14. Bollinger, Christopher R. & Ihlanfeldt, Keith R., 1997. "The Impact of Rapid Rail Transit on Economic Development: The Case of Atlanta's MARTA," Journal of Urban Economics, Elsevier, vol. 42(2), pages 179-204, September.
  15. Garcia-Mila, Teresa & McGuire, Therese J & Porter, Robert H, 1996. "The Effect of Public Capital in State-Level Production Functions Reconsidered," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 177-80, February.
  16. Joseph Gyourko & Richard Voith, 1997. "Does the U.S. tax treatment of housing promote suburbanization and central city decline?," Working Papers 97-13, Federal Reserve Bank of Philadelphia.
  17. Crihfield, John B. & Panggabean, Martin P. H., 1995. "Is public infrastructure productive? A metropolitan perspective using new capital stock estimates," Regional Science and Urban Economics, Elsevier, vol. 25(5), pages 607-630, October.
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Cited by:
  1. Andrew F. Haughwout, 2001. "Infrastructure and social welfare in metropolitan America," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 1-16.

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