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Passenger flows in CGE models for transport project evaluation


  • Bröcker, Johannes



Recently computable general equilibrium methods are becoming more and more popular for estimating welfare effects of transport projects, when a differentiation by region or social group is required. This paper focuses on the spatial distributional dimension. Most spatial CGE applications, however, have up to now only taken the impact of goods transport costs into consideration. To a large extent, however, welfare effects are due to time and cost savings in passenger transport. This paper extends the CGE approach by including private passenger transport. It aims at a model design deriving passenger flows from individual optimising behaviour; it uses parsimonious functional forms such that it is possible to calibrate the model using benchmark data on O-D passenger flows and willingness to pay estimates for time savings. The latter will be borrowed from the literature. The paper will present different specifications: with and without an explicit time constraint; continuous and discrete decisions on the level of the individual. Equivalent variation measures for quantifying welfare impacts in monetary terms will be derived.

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  • Bröcker, Johannes, 2002. "Passenger flows in CGE models for transport project evaluation," ERSA conference papers ersa02p163, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa02p163

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    References listed on IDEAS

    1. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    2. Kiminori Matsuyama, 1995. "Complementarities and Cumulative Processes in Models of Monopolistic Competition," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 701-729, June.
    3. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    4. Bröcker, Johannes, 1998. "Spatial effects of transeuropean networks: Preliminary results from a spatial computable general equilibrium analysis," Discussion Papers 4/98, Technische Universität Dresden, "Friedrich List" Faculty of Transport and Traffic Sciences, Institute of Transport and Economics.
    5. Johannes Brocker & d’Artis Kancs, 2001. "Methodology for the Assessment of Spatial Economic Impacts of Transport Projects and Policies," EERI Research Paper Series EERI_RP_2001_03, Economics and Econometrics Research Institute (EERI), Brussels.
    6. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
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