IDEAS home Printed from https://ideas.repec.org/p/ssb/dispap/154.html
   My bibliography  Save this paper

Returns to Publicly Owned Transport Infrastructure Investment . A Cost Function/Cost Share Approach for Norway, 1971-1991

Author

Listed:

Abstract

An issue of major concern to politicians and policy-makers around the world today is whether transport infrastructure investments, such as those in roads and airports, generate enough economic benefits to justify their very large price tag. Beginning in the mid 1970s, nearly all OECD countries experienced a sustained decline both in public investment and in private sector output. Since infrastructure comprises the vast majority of public capital in these countries, this led many economists to conclude that underinvestment in infrastructure was largely responsible for the low growth rates in output and productivity which were experienced by these countries. In our paper, we discuss the findings in the literature with respect to both econometric and modeling deficiencies. Based on these criticisms, we develop a cost function modeling approach which includes public transport infrastructure capital, perform an econometric analysis and discuss several of our estimates of infrastructure productivity effects. The paper concludes that, in nearly all production sectors (except oil/agriculture), the public transport infrastructure investments made in Norway over the last 20 years significantly reduced private production costs and altered demand for private inputs. However, we find such effects to be statistically insignificant at the aggregate level.

Suggested Citation

  • Torstein Bye & Alexandra Katz, 1995. "Returns to Publicly Owned Transport Infrastructure Investment . A Cost Function/Cost Share Approach for Norway, 1971-1991," Discussion Papers 154, Statistics Norway, Research Department.
  • Handle: RePEc:ssb:dispap:154
    as

    Download full text from publisher

    File URL: http://www.ssb.no/a/publikasjoner/pdf/DP/dp_154.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Andrew C. Harvey, 1990. "The Econometric Analysis of Time Series, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 026208189x, January.
    2. Ernst R. Berndt & Bengt Hansson, 1991. "Measuring the Contribution of Public Infrastructure Capital in Sweden," NBER Working Papers 3842, National Bureau of Economic Research, Inc.
    3. Carmit Shwartz & W. Erwin Diewert & Kevin J. Fox, 2014. "Consumer Benefits of Infrastructure Services," Discussion Papers 2014-17, School of Economics, The University of New South Wales.
    4. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    5. Nadiri, M Ishaq & Mamuneas, Theofanis P, 1994. "The Effects of Public Infrastructure and R&D Capital on the Cost Structure and Performance of U.S. Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 22-37, February.
    6. Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-1196, September.
    7. John A. Tatom, 1991. "Public capital and private sector performance," Review, Federal Reserve Bank of St. Louis, issue May, pages 3-15.
    8. Alicia H. Munnell, 1990. "Why has productivity growth declined? Productivity and public investment," New England Economic Review, Federal Reserve Bank of Boston, issue Jan, pages 3-22.
    9. Lynde, Catherine & Richmond, J, 1993. "Public Capital and Total Factor Productivity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(2), pages 401-414, May.
    10. Eisner, Robert, 1994. "Real government saving and the future," Journal of Economic Behavior & Organization, Elsevier, vol. 23(2), pages 111-126, March.
    11. David Alan Aschauer, 1990. "Why is infrastructure important?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 34, pages 21-68.
    12. Alicia H. Munnell & Leah M. Cook, 1990. "How does public infrastructure affect regional economic performance?," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 11-33.
    13. Granger, C. W. J. & Newbold, Paul, 1986. "Forecasting Economic Time Series," Elsevier Monographs, Elsevier, edition 2, number 9780122951831 edited by Shell, Karl.
    14. Seitz, Helmut, 1994. "Public capital and the demand for private inputs," Journal of Public Economics, Elsevier, vol. 54(2), pages 287-307, June.
    15. Lynde, Catherine & Richmond, James, 1992. "The Role of Public Capital in Production," The Review of Economics and Statistics, MIT Press, vol. 74(1), pages 37-44, February.
    16. Ratner, Jonathan B., 1983. "Government capital and the production function for U.S. private output," Economics Letters, Elsevier, vol. 13(2-3), pages 213-217.
    17. Shah, Anwar, 1992. "Dynamics of Public Infrastructure, Industrial Productivity and Profitability," The Review of Economics and Statistics, MIT Press, vol. 74(1), pages 28-36, February.
    18. Seitz, Helmut, 1993. "A Dual Economic Analysis of the Benefits of the Public Road Network," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 27(3), pages 223-239, September.
    19. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Infrastructure; public transport investment; economic growth.;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • 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:ssb:dispap:154. 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: (L Maasø) or (Rebekah McClure). General contact details of provider: http://edirc.repec.org/data/ssbgvno.html .

    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.