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From periphery to core: measuring agglomeration effects using high-speed rail

Gabriel Ahlfeldt and Arne Feddersen

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

Abstract: We analyze the economic impact of the German high-speed rail (HSR) connecting Cologne and Frankfurt, which provides plausibly exogenous variation in access to surrounding economic mass. We find a causal effect of about 8.5% on average of the HSR on the GDP of three counties with intermediate stops. We make further use of the variation in bilateral transport costs between all counties in our study area induced by the HSR to identify the strength and spatial scope of agglomeration forces. Our most careful estimate points to an elasticity of output with respect to market potential of 12.5%. The strength of the spillover declines by 50% every 30 minutes of travel time, diminishing to 1% after about 200 minutes. Our results further imply an elasticity of per-worker output with respect to economic density of 3.8%, although the effects seem driven by worker and firm selection.

Keywords: accessibility; agglomeration; density; high-speed rail; market potential; transport policy; productivity (search for similar items in EconPapers)
JEL-codes: R12 R38 R48 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-ene, nep-geo, nep-reg, nep-tre and nep-ure
Date: 2018-03-01
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Published in Journal of Economic Geography, 1, March, 2018, 18(2), pp. 355-390. ISSN: 1468-2702

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http://eprints.lse.ac.uk/69763/ Open access version. (application/pdf)

Related works:
Journal Article: From periphery to core: measuring agglomeration effects using high-speed rail (2018) Downloads
Working Paper: From Periphery to Core: Measuring Agglomeration Effects Using High-Speed Rail (2015) Downloads
Working Paper: From periphery to core: measuring agglomeration effects using high-speed rail (2015) Downloads
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