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Chicken or egg? The PVAR econometrics of transportation

Author

Listed:
  • Gabriel M. Ahlfeldt
  • Kristoffer Moeller
  • Nicolai Wendland

Abstract

To analyse the mutually dependent relationship between local economic performance, demand for and supply of transport services, we employ the structural panel VAR method that is popular in the macroeconomic literature, but has not previously been applied to the modelling of the within-city dynamics of transportation. We focus on a within-city panel of Berlin, Germany during the heyday of the construction of its dense public transit network (1890–1914). Our results suggest that economic outcomes and a supply of transport infrastructure mutually determine each other. We find a short-run (long-run) elasticity of property prices with respect to transport supply of 2% (8.5%). Both transport demand and supply seem to be driven more by firms than by residents.

Suggested Citation

  • Gabriel M. Ahlfeldt & Kristoffer Moeller & Nicolai Wendland, 2015. "Chicken or egg? The PVAR econometrics of transportation," Journal of Economic Geography, Oxford University Press, vol. 15(6), pages 1169-1193.
    • Handle: RePEc:oup:jecgeo:v:15:y:2015:i:6:p:1169-1193.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbu037
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    Cited by:

    1. Ahlfeldt, Gabriel M. & Pietrostefani, Elisabetta, 2019. "The economic effects of density: A synthesis," Journal of Urban Economics, Elsevier, vol. 111(C), pages 93-107.
    2. Rayaprolu, Hema & Levinson, David, 2024. "Co-evolution of public transport access and ridership," Journal of Transport Geography, Elsevier, vol. 116(C).
    3. Qiu, Guo & Xu, Wangtu (Ato) & Li, Ling, 2018. "Key factors to annual investment in public transportation sector: The case of China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 107(C), pages 1-19.
    4. Jiang, Liangyu & Xuan, Ye & Zhang, Kerong, 2025. "Dynamic interaction and evolution analysis of the resource-environment-economy-society complex system in China under the advancement of smart cities," Renewable Energy, Elsevier, vol. 244(C).
    5. Gabriel M Ahlfeldt, 2018. "Weights to Address Non-parallel Trends in Panel Difference-in-differences Models," CESifo Economic Studies, CESifo Group, vol. 64(2), pages 216-240.
    6. Shutian Zhou & Guofang Zhai & Yijun Shi, 2018. "What Drives the Rise of Metro Developments in China? Evidence from Nantong," Sustainability, MDPI, vol. 10(8), pages 1-20, August.
    7. Liao, Maozhu & Zhang, Yilin & Cheung, Tommy, 2025. "Airline network response to government policies: COVID-19 and Russian airspace closure," Transport Policy, Elsevier, vol. 169(C), pages 74-89.
    8. Gabriel M. Ahfeldt & Elisabetta Pietrostefani, 2017. "The Compact City in Empirical Research: A Quantitative Literature Review," SERC Discussion Papers 0215, Centre for Economic Performance, LSE.
    9. Philipp Piribauer & Peter Huber, 2017. "Beschäftigungseffekte entlang des hochrangigen Straßennetzes in Österreich," WIFO Studies, WIFO, number 60468, June.
    10. Sevrin Waights, 2018. "Does the law of one price hold for hedonic prices?," Urban Studies, Urban Studies Journal Limited, vol. 55(15), pages 3299-3317, November.
    11. Ahlfeldt, Gabriel M. & Nitsch, Volker & Wendland, Nicolai, 2019. "Ease vs. noise: Long-run changes in the value of transport (dis)amenities," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    12. Odolinski, Kristofer & Wheat, Phill, 2018. "Dynamics in rail infrastructure provision: Maintenance and renewal costs in Sweden," Economics of Transportation, Elsevier, vol. 14(C), pages 21-30.
    13. Gabriel Ahlfeldt & Volker Nitsch & Nicolai Wendland, 2016. "Ease vs. Noise: On the Conflicting Effects of Transportation Infrastructure," CESifo Working Paper Series 6058, CESifo.
    14. Ahlfeldt, Gabriel M. & Nitsch, Volker & Wendland, Nicolai, 2019. "Ease versus noise: long-run changes in the value of transport (dis)amenities," LSE Research Online Documents on Economics 102824, London School of Economics and Political Science, LSE Library.
    15. Ahfeldt, Gabriel M. & Pietrostefani, Elisabetta, 2017. "The compact city in empirical research: A quantitative literature review," LSE Research Online Documents on Economics 83638, London School of Economics and Political Science, LSE Library.
    16. Damian Damianov & Cheng Yan & Xiangdong Wang, 2018. "Measures of mortgage default risk and local house price dynamics ," ERES eres2018_163, European Real Estate Society (ERES).
    17. Marta Santagata, 2022. "Roads and intra‐national trade: Evidence from Italian regions," Papers in Regional Science, Wiley Blackwell, vol. 101(6), pages 1383-1409, December.
    18. Odolinski, Kristofer & Wheat, Phillip, 2016. "Dynamics in rail infrastructure provision: maintenance and renewal costs in Sweden," Working papers in Transport Economics 2016:23, CTS - Centre for Transport Studies Stockholm (KTH and VTI), revised 11 Dec 2017.
    19. Jean Dubé & Charles-David Babin & Jean-Christophe Dubé & Hemza Lekkat & Alexandre Potvin & Olivier Ringue, 2017. "What comes first, residential or commercial development? Measuring the causal links for a Canadian city over a century," Letters in Spatial and Resource Sciences, Springer, vol. 10(1), pages 57-74, March.
    20. Kristoffer Moeller, 2018. "Culturally clustered or in the cloud? How amenities drive firm location decision in Berlin," Journal of Regional Science, Wiley Blackwell, vol. 58(4), pages 728-758, September.
    21. Jussila Hammes, Johanna, 2015. "Political economics or Keynesian demand-side policies: What determines transport infrastructure investment in Swedish municipalities?," Research in Transportation Economics, Elsevier, vol. 51(C), pages 49-60.
    22. Li, Hongbo & Liu, Yali & Peng, Kaili, 2018. "Characterizing the relationship between road infrastructure and local economy using structural equation modeling," Transport Policy, Elsevier, vol. 61(C), pages 17-25.

    More about this item

    JEL classification:

    • N73 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: Pre-1913
    • N74 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: 1913-
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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