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Valuing Domestic Transport Infrastructure: A View from the Route Choice of Exporters

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  • Jingting Fan

    (Pennsylvania State University)

  • Yi Lu

    (Tsinghua University)

  • Wenlan Luo

    (Tsinghua University)

Abstract

A key input to quantitative evaluations of transport infrastructure projects is their impact on transport costs. We propose a new method of estimating this impact relying on widely accessible customs data: by using the route choice of exporters. We combine our method with a spatial equilibrium model to study the effects of the massive expressway construction in China between 1999 and 2010. We find transport costs are 20% lower on expressways than on regular roads. The expressways construction increases aggregate exports by 10% and domestic trade by 14%. It generates 5.1% welfare gains, implying a 150% net return to investment.

Suggested Citation

  • Jingting Fan & Yi Lu & Wenlan Luo, 2023. "Valuing Domestic Transport Infrastructure: A View from the Route Choice of Exporters," The Review of Economics and Statistics, MIT Press, vol. 105(6), pages 1562-1579, November.
    • Handle: RePEc:tpr:restat:v:105:y:2023:i:6:p:1562-1579
    DOI: 10.1162/rest_a_01084
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