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Is infrastructure productive? Evaluating the effects of specific infrastructure projects on firm productivity within New Zealand

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  • Timmins, Jason

Abstract

The paper investigates the feasibility of using a variant of the spatial equilibrium model to estimate the productivity effects of a specific infrastructure project in New Zealand. Policy makers are interested in the marginal effects of infrastructure investment on productivity and an evaluation of such effects would provide a useful check on the appropriateness and adequacy of current decision rules and institutions. To date, there appear to be no examples of using a spatial equilibrium model to estimate the productivity effects of a specific infrastructure project. However, the analysis in this paper suggests that such an approach is feasible. There is a range of data and estimation issues that needs to be addressed in the use of a spatial equilibrium model for this purpose, but we find that a reasonably useful range of data is available in New Zealand. The next step in determining feasibility is to select a particular infrastructure project, and to develop an empirical model based on available data.

Suggested Citation

  • Timmins, Jason, 2005. "Is infrastructure productive? Evaluating the effects of specific infrastructure projects on firm productivity within New Zealand," Motu Working Papers 292887, Motu Economic and Public Policy Research.
  • Handle: RePEc:ags:motuwp:292887
    DOI: 10.22004/ag.econ.292887
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