IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa15p16.html

Evaluation tool for wider economic effects of railway investments ? making CGE results accessible

Author

Listed:
  • Jouko Kinnunen

  • Heikki Metsäranta
  • Hannu Törmä
  • Seppo Laakso
  • Urszula Zimoch

Abstract

Transport sector has a long tradition of using the principles of practical cost benefit analysis (CBA) in project appraisal that analyses the primary impacts of transport investments. The standard transport project assessment is necessary but not sufficient for the estimation of the wider economic impacts, which are in increasing demand among decision makers. Computable General Equilibrium models (CGE) have been proven to be powerful tools in the assessment of economic impacts of infrastructure investments. In this project, GEMPACK-based dynamic regional CGE-models (RegFinDyn and RegSweDyn) have been used in the assessment of rail investments in Finland and in Sweden. The models are fairly standard versions of the Australian TERM model, with some exceptions regarding labor market, migration, demography and agglomeration economies. The use of these models is, however, rather expensive and requires specific skills, software and knowledge. This project tackled these contradicting needs for a complex CGE-modelling and the desired easiness and flexibility of the analysis: A freely available spreadsheet tool was developed with a streamlined interface that uses a large number of previously made CGE-model simulations as basis for the assessment. The developed twin tools were named WebRailSwe and WebRailFin. The tools are made for a quantitative, first approximation of the wider economic impacts of large rail investments in the national areas of Sweden or Finland. The wider economic impacts calculated by this tool are supplementary to the results of a standard project assessment (CBA). The tools use generalised results of RegSweDyn and RegFinDyn CGE-modelling, which could be termed as ?model of a model? approach. CGE model results are used as observations to estimate regression equations where investment shock variables are used to explain the observed deviations from the base run. The four economic indicators calculated by the tools are real GDP, real household consumption, employment and population. It has been proven that it is possible to have an accessible tool that is relatively simple to use but gives results that are based on comprehensive CGE-modelling. This can be considered a promising start for a wider consideration of advanced modelling of economic impacts in the transport sector. However, the results of this project, WebRailSwe and WebRailFin, are only applicable to railway investments, and the results are calculated and presented on a spatial resolution that is rather coarse. Further work could be done to develop similar tools for road investments and other forms of transport improvements, and to increase the spatial resolution of the tools.

Suggested Citation

  • Jouko Kinnunen & Heikki Metsäranta & Hannu Törmä & Seppo Laakso & Urszula Zimoch, 2015. "Evaluation tool for wider economic effects of railway investments ? making CGE results accessible," ERSA conference papers ersa15p16, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa15p16
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa15/e150825aFinal00016.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Glyn Wittwer & Mark Horridge, 2010. "Bringing Regional Detail to a CGE Model using Census Data," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(2), pages 229-255.
    2. Olivier Bargain & Kristian Orsini & Andreas Peichl, 2012. "Comparing Labor Supply Elasticities in Europe and the US: New Results," Working Papers halshs-00805736, HAL.
    3. Dietmar Meyer & Jörg Lackenbauer, 2005. "EU cohesion policy and the equity-efficiency trade-off - Adding dynamics to Martin's model," ERSA conference papers ersa05p564, European Regional Science Association.
    4. Daniel J. Graham, 2007. "Agglomeration Economies and Transport Investment," OECD/ITF Joint Transport Research Centre Discussion Papers 2007/11, OECD Publishing.
    5. Jouko Kinnunen & Honkatukia, Juha & Ahokas, Jussi, 2012. "Regional effects of curbing future deficits– alternative ways to respond to increasing municipal expenditures," EcoMod2012 3893, EcoMod.
    6. Honkatukia, Juha & Kinnunen, Jouko & Ahokas, Jussi & Simola, Antti & Tamminen, Saara, 2013. "Regionalization and its effects in Finland – a regional AGE modelling analysis," Working Papers 45, VATT Institute for Economic Research.
    7. Jouko Kinnunen & Juha Honkatukia & Juss Ahokas, 2012. "Regional effects of curbing future deficits– alternative ways to respond to increasing municipal expenditures," ERSA conference papers ersa12p174, European Regional Science Association.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michal Horvath & Matus Senaj & Zuzana Siebertova & Norbert Svarda, 2015. "The End of the Flat Tax Experiment in Slovakia," Discussion Papers 15/12, Department of Economics, University of York.
    2. Metaxas, Theodore & Kallioras, Dimitris, 2013. "Small and medium-sized firms' competitiveness and territorial characteristics/assets: The cases of Bari, Varna and Thessaloniki," MPRA Paper 52446, University Library of Munich, Germany.
    3. Chiara Daniela Pronzato, 2015. "Fighting Lone Mothers’ Poverty Through In-Work Benefits: Methodological Issues and Policy Suggestions," CESifo Economic Studies, CESifo Group, vol. 61(1), pages 95-122.
    4. Francois Jacobus Stofberg & Jan Van Heerden, 2016. "The Short-Term Economic Impact of Levying E-Tolls on Industries," South African Journal of Economics, Economic Society of South Africa, vol. 84(4), pages 574-593, December.
    5. George Economides & Thomas Moutos, 2016. "Can Minimum Wages Raise Workers’ Incomes in the Long Run?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 18(6), pages 961-978, December.
    6. Hans Fehr & Manuel Kallweit & Fabian Kindermann, 2013. "Reforming Family Taxation in Germany - Labor Supply vs. Insurance Effects," CESifo Working Paper Series 4386, CESifo.
    7. Löffler, Max & Peichl, Andreas & Siegloch, Sebastian, 2013. "Validating Structural Labor Supply Models," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79819, Verein für Socialpolitik / German Economic Association.
    8. Määttänen, Niku & Salminen, Tomi, 2015. "Unemployment Accounts - A Finnish Application," ETLA Working Papers 29, The Research Institute of the Finnish Economy.
    9. Karyn Morrissey, 2016. "A location quotient approach to producing regional production multipliers for the Irish economy," Papers in Regional Science, Wiley Blackwell, vol. 95(3), pages 491-506, August.
    10. Olivier Bargain & Mathias Dolls & Dirk Neumann & Andreas Peichl & Sebastian Siegloch, 2014. "Comparing inequality aversion across countries when labor supply responses differ," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(5), pages 845-873, October.
    11. Glyn Wittwer, 2025. "GlobeTERM, combining multi-country and sub-national detail," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 10(2), pages 66-116, December.
    12. Esmedekh Lkhanaajav, 2016. "CoPS-style CGE modelling and analysis," Centre of Policy Studies/IMPACT Centre Working Papers g-264, Victoria University, Centre of Policy Studies/IMPACT Centre.
    13. Mennuni, Alessandro, 2013. "Labor Force Composition and Aggregate Fluctuations," Discussion Paper Series In Economics And Econometrics 1302, Economics Division, School of Social Sciences, University of Southampton.
    14. Theodore METAXAS & Athina ECONOMOU, 2016. "Assesing The Determinantts Of Firms’ Competitiveness In Greece: A Structural Equation Modeling Analysys," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 17, pages 91-113, June.
    15. Zuzana Siebertova & Matus Senaj & Norbert Svarda & Jana Valachyova, 2015. "To Work or Not to Work? Updated Estimates of Labour Supply Elasticities," Working Papers Working Paper No. 3/2015, Council for Budget Responsibility.
    16. Zawalinska, Katarzyna & Tran, Nhi & Ploszaj, Adam, 2019. "Planning R&D in a post centrally-planned economy: assessing the macroeconomic effects in Poland," Conference papers 333106, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    17. Mazzutti, Caio Cícero Toledo Piza da Costa, . "Three essays on the causal impacts of child labour laws in Brazil," Economics PhD Theses, Department of Economics, University of Sussex Business School, number 0616, December.
    18. Kabátek, Jan & van Soest, Arthur & Stancanelli, Elena, 2014. "Income taxation, labour supply and housework: A discrete choice model for French couples," Labour Economics, Elsevier, vol. 27(C), pages 30-43.
    19. Francesco Figari & Alari Paulus, 2015. "The Distributional Effects of Taxes and Transfers Under Alternative Income Concepts," Public Finance Review, , vol. 43(3), pages 347-372, May.
    20. A. A. Romashina, 2021. "How Express Trains from Moscow Affect Population Mobility," Regional Research of Russia, Springer, vol. 11(1), pages 61-70, January.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    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:wiw:wiwrsa:ersa15p16. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.