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The Spatial Impact of Local Infrastructural Investment in New Zealand

William Cochrane (), Arthur Grimes, Philip McCann () and Jacques Poot
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William Cochrane: University of Waikato

No 10_12, 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: local infrastructure; economic growth; migration; land value; spatial spillover (search for similar items in EconPapers)
JEL-codes: H54 J21 R12 (search for similar items in EconPapers)
Pages: 38 Pages
Date: 2010-10
New Economics Papers: this item is included in nep-geo and nep-ure
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