Simulating the impact of transport infrastructure investment on wages: a dynamic spatial panel model approach

Bernard Fingleton () and Nikodem Szumilo

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper estimates the impact of a multi-billion pound investment in Britain's rail transport infrastructure, in the form of high-speed rail links, on wage levels across each of 347 districts of England and Wales. The impacts are based on a dynamic spatial panel model adaptation of standard urban economics based on employment density and commuting patterns. This allows estimation of these global impacts operating via improved commuting times. We demonstrate that while estimates of a traditional market potential approach with fixed effects are to some extent qualitatively and quantitatively similar to our predictions, our predictions allow more heterogeneous effects and give more accurate forecasts. The study finds that on average wages increase by around 2% as employment centres gain improved access to more skilled workers and as spillover effects become spatially more extensive. While most areas see modest positive effects, some locations are negatively affected, in the extreme case by as much as 7%.

Keywords: dynamic spatial panel model; simulation; prediction; transport infrastructure; commuting; wages; regional development (search for similar items in EconPapers)
JEL-codes: C33 C53 J31 R11 R12 R40 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2019-03-01
New Economics Papers: this item is included in nep-geo, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Published in Regional Science and Urban Economics, 1, March, 2019, 75, pp. 148-164. ISSN: 0166-0462

Downloads: (external link)
http://eprints.lse.ac.uk/100014/ Open access version. (application/pdf)

Related works:
Journal Article: Simulating the impact of transport infrastructure investment on wages: A dynamic spatial panel model approach (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:100014

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().