IDEAS home Printed from https://ideas.repec.org/p/swe/wpaper/2014-17.html
   My bibliography  Save this paper

Consumer Benefits of Infrastructure Services

Author

Listed:
  • Carmit Shwartz

    (School of Economics, Australian School of Business, the University of New South Wales)

  • W. Erwin Diewert

    (University of British Columbia and University of New South Wales)

  • Kevin J. Fox

    () (School of Economics & Centre for Applied Economic Research, Australian School of Business, the University of New South Wales)

Abstract

This paper provides methodologies for evaluating consumer benefits of infrastructure services using potentially observable information. We define benefit measures for consumers and, using general principles from the index number literature, derive alternative first and second order approximations to these measures under the assumption of fixed prices for market goods and services. We then describe how the benefit measures and their associatedapproximations can be used in quantifying the economic benefits when prices are allowed to change endogenously as the provision of infrastructure services changes. In addition, under quite unrestrictive assumptions, a measure of welfare change based only on potentially observable data is derived.

Suggested Citation

  • 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.
  • Handle: RePEc:swe:wpaper:2014-17
    as

    Download full text from publisher

    File URL: http://research.economics.unsw.edu.au/RePEc/papers/2014-17.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Boisso, Dale & Grosskopf, Shawna & Hayes, Kathy, 2000. "Productivity and efficiency in the US: effects of business cycles and public capital," Regional Science and Urban Economics, Elsevier, vol. 30(6), pages 663-681, December.
    2. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    3. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    4. Seitz, Helmut, 1995. "The Productivity and Supply of Urban Infrastructures," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 29(2), pages 121-141, May.
    5. David Albouy, 2008. "Are Big Cities Bad Places to Live? Estimating Quality of Life across Metropolitan Areas," NBER Working Papers 14472, National Bureau of Economic Research, Inc.
    6. Morrison, Catherine J & Schwartz, Amy Ellen, 1996. "State Infrastructure and Productive Performance," American Economic Review, American Economic Association, vol. 86(5), pages 1095-1111, December.
    7. Seitz, Helmut, 1994. "Public capital and the demand for private inputs," Journal of Public Economics, Elsevier, vol. 54(2), pages 287-307, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joeé Emilio Boscá & Francisco Javier Escribá & María José Murgui, 2002. "The Effect of Public Infrastructure on the Private Productive Sector of Spanish Regions," Journal of Regional Science, Wiley Blackwell, vol. 42(2), pages 301-326.
    2. Antonis Rovolis & Nigel Spence, 1998. "Duality theory and cost function analysis in a regional context: the impact of public infrastructure capital in the Greek Regions," ERSA conference papers ersa98p465, European Regional Science Association.
    3. 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.
    4. W. Erwin Diewert, 1986. "Export Supply and Import Demand Functions: A Production Theory Approach," NBER Working Papers 2011, National Bureau of Economic Research, Inc.
    5. Mamuneas, Theofanis P. & Ishaq Nadiri, M., 1996. "Public R&D policies and cost behavior of the US manufacturing industries," Journal of Public Economics, Elsevier, vol. 63(1), pages 57-81, December.
    6. Atsushi Tsuneki, 2002. "Shadow-Pricing Interpretation of the Pigovian Rule for the Optimal Provision of Public Goods: A Note," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(1), pages 93-104, January.
    7. 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.
    8. Bruno Jullien & Frederic Rychen & Antoine Soubeyran, 2000. "Local Public Investment and Competition for a Firm," Econometric Society World Congress 2000 Contributed Papers 1400, Econometric Society.

    More about this item

    Keywords

    Consumer benefits; infrastructure services; first order approximation; second order approximation; exible functional forms; index number theory;

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:swe:wpaper:2014-17. 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: (Hongyi Li) or (Rebekah McClure). General contact details of provider: http://edirc.repec.org/data/senswau.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.