IDEAS home Printed from https://ideas.repec.org/a/eee/retrec/v47y2014icp92-102.html
   My bibliography  Save this article

Wider economic benefits of transport schemes in remote rural areas

Author

Listed:
  • Laird, James J.
  • Mackie, Peter J.

Abstract

Remote rural areas tend to experience slower population growth (sometimes decline), slower growth in GDP, fewer employment opportunities and lower productivity relative to the economy as a whole. Transport policy interventions are typically focussed on addressing structural economic weaknesses. Yet despite a strong general interest in wider economic benefits, their relevance to schemes in remote rural areas has received very little previous discussion. We argue that remote rural areas are likely to exhibit market distortions in the goods and labour markets, primarily arising from a lack of alternatives and choices in these areas. We also illustrate the empirical importance of the wider economic benefits, caused by these distortions. Using case studies from the Highlands and Islands of Scotland to do so. We find that focusing the cost benefit analysis only on the primary transport market can significantly underestimate welfare benefits, and that the degree of underestimation varies significantly case by case. It is highest for schemes where the impacts on business and employment are large and where all of the output and employment effects occur in a remote rural area.

Suggested Citation

  • Laird, James J. & Mackie, Peter J., 2014. "Wider economic benefits of transport schemes in remote rural areas," Research in Transportation Economics, Elsevier, vol. 47(C), pages 92-102.
  • Handle: RePEc:eee:retrec:v:47:y:2014:i:c:p:92-102
    DOI: 10.1016/j.retrec.2014.09.022
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0739885914000638
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Manning, Alan, 2003. "The real thin theory: monopsony in modern labour markets," Labour Economics, Elsevier, vol. 10(2), pages 105-131, April.
    2. Rebekka Christopoulou & Philip Vermeulen, 2012. "Markups in the Euro area and the US over the period 1981–2004: a comparison of 50 sectors," Empirical Economics, Springer, vol. 42(1), pages 53-77, February.
    3. Haveman Robert H. & Farrow Scott, 2011. "Labor Expenditures and Benefit-Cost Accounting in Times of Unemployment," Journal of Benefit-Cost Analysis, De Gruyter, vol. 2(2), pages 1-9, April.
    4. Ninette Pilegaard & Mogens Fosgerau, 2008. "Cost Benefit Analysis of a Transport Improvement in the Case of Search Unemployment," Journal of Transport Economics and Policy, University of Bath, vol. 42(1), pages 23-42, January.
    5. repec:eee:jotrge:v:19:y:2011:i:1:p:1-12 is not listed on IDEAS
    6. Esperanza Vera-Toscano & Euan Phimister & Alfons Weersink, 2004. "Panel Estimates of the Canadian Rural/Urban Women's Wage Gap," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 1138-1151.
    7. Harald Badinger, 2007. "Has the EU's Single Market Programme Fostered Competition? Testing for a Decrease in Mark-up Ratios in EU Industries," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(4), pages 497-519, August.
    8. Jill L. Findeis & Leif Jensen, 1998. "Employment Opportunities in Rural Areas: Implications for Poverty in a Changing Policy Environment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(5), pages 1000-1007.
    9. Richards, Timothy J. & Acharya, Ram N. & Kagan, Albert, 2008. "Spatial competition and market power in banking," Journal of Economics and Business, Elsevier, vol. 60(5), pages 436-454.
    10. Anthony J. Venables, 2007. "Evaluating Urban Transport Improvements: Cost-Benefit Analysis in the Presence of Agglomeration and Income Taxation," Journal of Transport Economics and Policy, University of Bath, vol. 41(2), pages 173-188, May.
    11. Monica Brezzi & Lewis Dijkstra & Vicente Ruiz, 2011. "OECD Extended Regional Typology: The Economic Performance of Remote Rural Regions," OECD Regional Development Working Papers 2011/6, OECD Publishing.
    12. Daniel J Graham, 2009. "Identifying urbanisation and localisation externalities in manufacturing and service industries," Papers in Regional Science, Wiley Blackwell, vol. 88(1), pages 63-84, March.
    13. Elhorst, J. Paul & Oosterhaven, Jan, 2008. "Integral Cost-Benefit Analysis of Maglev Rail Projects Under Market Imperfections," The Journal of Transport and Land Use, Center for Transportation Studies, University of Minnesota, vol. 1(1), pages 65-87.
    14. Maureen Kilkenny, 2010. "Urban/Regional Economics And Rural Development," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 449-470.
    15. Janice Fanning Madden, 1981. "Why Women Work Closer to Home," Urban Studies, Urban Studies Journal Limited, vol. 18(2), pages 181-194, June.
    16. Daniel J. Graham, 2007. "Agglomeration, Productivity and Transport Investment," Journal of Transport Economics and Policy, University of Bath, vol. 41(3), pages 317-343, September.
    17. Mohring, Herbert, 1993. "Maximizing, measuring, and not double counting transportation-improvement benefits: A primer on closed- and open-economy cost-benefit analysis," Transportation Research Part B: Methodological, Elsevier, vol. 27(6), pages 413-424, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Transportation; Infrastructure; Economic development; Cost benefit analysis; Remote rural;

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

    Statistics

    Access and download statistics

    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:eee:retrec:v:47:y:2014:i:c:p:92-102. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620614/description#description .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.