The Spatial Impact of Local Infrastructural Investment in New Zealand

William Cochrane, Arthur Grimes, Philip McCann and Jacques Poot

No 292611, Motu Working Papers from Motu Economic and Public Policy Research

Abstract: In this paper we estimate the impact of local authority infrastructure spending in New Zealand using spatial econometric modelling, with the infrastructure spending itself endogenously determined. Utilizing data from the New Zealand Census and Local Authorities Finance data (1991-2008), aggregated to functional labour market areas, we formulate a simultaneous equations growth model of real income, population, land rent and public infrastructure investment. Estimation is conducted using a spatial 3SLS procedure. We find that an increase in local infrastructure spending increases population growth, real income and land values, but is itself endogenous and spatially correlated.

Keywords: Labor and Human Capital; Public Economics (search for similar items in EconPapers)
Pages: 38
Date: 2010-09
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Persistent link: https://EconPapers.repec.org/RePEc:ags:motuwp:292611

DOI: 10.22004/ag.econ.292611

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