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Pitfalls in estimating “wider economic benefits” of transportation projects


  • Yoshitsugu Kanemoto

    (National Graduate Institute for Policy Studies)


The Department for Transport in the United Kingdom has been a pioneer in including indirect benefits in the cost–benefit analysis of a transport project. They identify three types of wider impacts, i.e., (1) agglomeration, (2) increased or decreased output in imperfectly competitive markets, and (3) labor market impacts, and provide detailed guidelines on how to estimate them. Extending a differentiated product model that provides the microfoundations of urban agglomeration economies to include all three types of the wider impacts, this paper examines whether the British methodology of estimating the wider benefits can be justified theoretically.

Suggested Citation

  • Yoshitsugu Kanemoto, 2013. "Pitfalls in estimating “wider economic benefits” of transportation projects," GRIPS Discussion Papers 13-20, National Graduate Institute for Policy Studies.
  • Handle: RePEc:ngi:dpaper:13-20

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    References listed on IDEAS

    1. Jan De Loecker & Frederic Warzynski, 2012. "Markups and Firm-Level Export Status," American Economic Review, American Economic Association, vol. 102(6), pages 2437-2471, October.
    2. Behrens, Kristian & Kanemoto, Yoshitsugu & Murata, Yasusada, 2015. "The Henry George Theorem in a second-best world," Journal of Urban Economics, Elsevier, vol. 85(C), pages 34-51.
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    5. Bresnahan, Timothy F., 1982. "The oligopoly solution concept is identified," Economics Letters, Elsevier, vol. 10(1-2), pages 87-92.
    6. Kanemoto, Yoshitsugu, 2013. "Second-best cost–benefit analysis in monopolistic competition models of urban agglomeration," Journal of Urban Economics, Elsevier, vol. 76(C), pages 83-92.
    7. Kanemoto, Yoshitsugu & Mera, Koichi, 1985. "General equilibrium analysis of the benefits of large transportation improvements," Regional Science and Urban Economics, Elsevier, vol. 15(3), pages 343-363, August.
    8. 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.
    9. Appelbaum, Elie, 1982. "The estimation of the degree of oligopoly power," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 287-299, August.
    10. Diego Puga, 2010. "The Magnitude And Causes Of Agglomeration Economies," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 203-219.
    11. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2008. "Spatial wage disparities: Sorting matters!," Journal of Urban Economics, Elsevier, vol. 63(2), pages 723-742, March.
    12. Melo, Patricia C. & Graham, Daniel J. & Noland, Robert B., 2009. "A meta-analysis of estimates of urban agglomeration economies," Regional Science and Urban Economics, Elsevier, vol. 39(3), pages 332-342, May.
    13. Kanemoto, Yoshitsugu, 2013. "Evaluating benefits of transportation in models of new economic geography," Economics of Transportation, Elsevier, vol. 2(2), pages 53-62.
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    Cited by:

    1. Behrens, Kristian & Kanemoto, Yoshitsugu & Murata, Yasusada, 2015. "The Henry George Theorem in a second-best world," Journal of Urban Economics, Elsevier, vol. 85(C), pages 34-51.
    2. repec:spr:anresc:v:59:y:2017:i:2:d:10.1007_s00168-017-0833-6 is not listed on IDEAS
    3. Morgenroth, Edgar, 2014. "The Regional Development Impacts of Transport Infrastructure: A Literature Review and Policy Implications," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT278.

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