Does High-Speed Rail Really Have a Positive Effect on City Consumption? A PSM-DID Approach With China Case

Xinshuo Hou, Dongyang Li and Jianghuan Peng
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Xinshuo Hou: Business School, Xiangtan University, Xiangtan, China
Dongyang Li: Business School, Xiangtan University, Xiangtan, China
Jianghuan Peng: Business School, Xiangtan University, Xiangtan, China

Journal of Regional Economics, 2022, vol. 1, issue 1, 48-67

Abstract: This paper evaluates the treatment effect of high-speed rail (HSR) operation on city consumption using the dataset of Chinese cities from 2003 to 2019. Firstly, the applicability of observations is discussed; secondly, observations with no appropriate contrast samples are dropped for more precise empirical results. Then, propensity score matching (PSM) is implied to have the database much more balanced and suitable for the difference-in-difference (DID) framework, that is, the PSM-DID approach. The main results find a novel phenomenon of Simpson's paradox regarding the HSR-consumption nexus, which indicates that even though we can observe the positive effect on the whole, the results argue negative relationships between HSR and consumption within subclass cities. In addition, a dose-response assessment (DR) and some other checks have been proposed to demonstrate robust estimation results.

Keywords: High-Speed Rail; City Consumption; PSM-DID; Dose-Response; Simpson's Paradox (search for similar items in EconPapers)
Date: 2022
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