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Highways, Market Access, and Spatial Sorting

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  • Stephan Fretz
  • Raphael Parchet
  • Frédéric Robert-Nicoud

Abstract

We design a spatial model featuring workers embodied with heterogeneous skills. In equilibrium, locations with improved market access become relatively more attractive to the high-skilled, high-income earners. We then empirically analyze the effects of the construction of the Swiss highway network between 1960 and 2010 on the distribution of income at the local level, as well as on employment and commuting by education level. We find that the advent of a new highway access within 10km led to a long-term 19%-increase of the share of high-income taxpayers and a 6%-decrease of the share of low-income taxpayers. Results are similar for employment data decomposed by education level, as well as for in- and out-commuters. Highways also contributed to job and residential urban sprawl.

Suggested Citation

  • Stephan Fretz & Raphael Parchet & Frédéric Robert-Nicoud, 2017. "Highways, Market Access, and Spatial Sorting," CESifo Working Paper Series 6770, CESifo.
    • Handle: RePEc:ces:ceswps:_6770
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    2. Gabriel Loumeau, 2020. "Regional Borders, Commuting and Transport Network Integration," KOF Working papers 20-489, KOF Swiss Economic Institute, ETH Zurich.
    3. Ge, Shilong & Yang, Xiaozhong & Zhang, Cheng & Xiong, Ying, 2023. "Heterogeneity of public services, gender identity, and the spatial allocation of real estate," Finance Research Letters, Elsevier, vol. 52(C).
    4. Wu, Bingyu & Levinson, David M., 2024. "A multi-modal analysis of the effect of transport on population and productivity in China," Journal of Transport Geography, Elsevier, vol. 116(C).
    5. Lisha Wang & Jian Wang & Xuepeng Qian, 2023. "Does the bullet train exacerbate urban shrinkage? Lessons from Japan," Papers in Regional Science, Wiley Blackwell, vol. 102(1), pages 187-212, February.
    6. Gal Amedi, 2023. "The Determinants of the Transit Accessibility Premium," Bank of Israel Working Papers 2023.12, Bank of Israel.
    7. Santamaria, Marta, 2020. "Reshaping Infrastructure: Evidence from the division of Germany," The Warwick Economics Research Paper Series (TWERPS) 1244, University of Warwick, Department of Economics.
    8. Santamaria, Marta, 2020. "Reshaping Infrastructure : Evidence from the division of Germany," CAGE Online Working Paper Series 456, Competitive Advantage in the Global Economy (CAGE).
    9. Ren, Qianping & West, Jeremy, 2023. "Cleaner waters and urbanization," Journal of Environmental Economics and Management, Elsevier, vol. 122(C).
    10. Bruno de Borger & Ismir Mulalic & Jan Rouwendal, 2019. "Productivity effects of an exogenous improvement in transport infrastructure: accessibility and the Great Belt Bridge," Tinbergen Institute Discussion Papers 19-065/VIII, Tinbergen Institute.
    11. Holl, Adelheid & Mariotti, Ilaria, 2018. "Highways and firm performance in the logistics industry," Journal of Transport Geography, Elsevier, vol. 72(C), pages 139-150.
    12. Luisa Dörr & Stefanie Gäbler, 2020. "Does Highway Accessibility Influence Local Tax Factors? Evidence from German Municipalities," ifo Working Paper Series 321, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    13. Riukula, Krista & Väänänen, Touko, 2024. "Estimating the Labour Market Impacts of Transport Projects in Finland," ETLA Working Papers 120, The Research Institute of the Finnish Economy.
    14. Okamoto, Chigusa & Sato, Yasuhiro, 2021. "Impacts of high-speed rail construction on land prices in urban agglomerations: Evidence from Kyushu in Japan," Journal of Asian Economics, Elsevier, vol. 76(C).
    15. Di Cataldo, Marco & Romani, Giulia, 2023. "The local impact of closing undersized schools," LSE Research Online Documents on Economics 119359, London School of Economics and Political Science, LSE Library.
    16. Twinam, Tate, 2022. "Trade competition and migration: Evidence from the quartz crisis," Journal of International Economics, Elsevier, vol. 138(C).
    17. David B Audretsch & Dirk Christian Dohse & João Pereira dos Santos, 0. "The effects of highway tolls on private business activity—results from a natural experiment," Journal of Economic Geography, Oxford University Press, vol. 20(6), pages 1331-1357.
    18. Bruno de Borger & Ismir Mulalic & Jan Rouwendal, 2019. "Productivity effects of an exogenous improvement in transport infrastructure: accessibility and the Great Belt Bridge," Tinbergen Institute Discussion Papers 19-065/VIII, Tinbergen Institute.
    19. Ignatov, Augustin, 2024. "European highway networks, transportation costs, and regional income," Regional Science and Urban Economics, Elsevier, vol. 104(C).
    20. Marco Di Cataldo & Giulia Romani, 2023. "Rational cuts? The local impact of closing undersized schools," Working Papers 2023:03, Department of Economics, University of Venice "Ca' Foscari".

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    More about this item

    Keywords

    transportation; highway; market access; income sorting;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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