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on Transport Economics |
| By: | Ragland, David R; Grembek, Offer; Orrick, Phyllis; Felschundneff, Grace |
| Abstract: | Road deaths are forecast to double by 2020, with the burden falling most heavily on low- and middle-income countries and, within those countries, on the most vulnerable and poorest road users. Half of the 1.2 million people killed and 50 million injured in road crashes each year are pedestrians, motorcyclists, bicyclists, and users of unsafe public transport; and more than 90 percent are from low- and middle-income countries. Because these are the areas where rapid motorization is taking place, the issue of safety in increasingly multi-modal environments is now of critical importance, particularly for pedestrians and bicyclists, since as vulnerable road users (VRU), they comprise a large proportion of injuries and deaths, and similar strategies for prevention of injuries and fatalities for these two groups are available. Although a great deal of additional research is needed to determine the costs and benefits of various proposed solutions, some basic principles can be identified to guide roadway and infrastructure design for improved pedestrian and bicyclist safety. The three broad but separate strategies for reducing the probability of an injury or fatality are: (i) reducing exposure, (ii) reducing the probability of a collision given exposure, and (iii) reducing the probability of injury given a collision. The purpose of this paper is to describe and illustrate these principles, discuss issues related to each one, and discuss the benefits—indeed, imperativeness—of the application of these principles by planners and traffic engineers. |
| Keywords: | Public Health, Other, International Public Health/International Health, Transportation and Highway Engineering |
| Date: | 2013–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsrrp:qt9qg3s59b&r=tre |
| By: | Philipp Breidenbach; Timo Mitze |
| Abstract: | Transport infrastructure is viewed as an important determinant of regional growth and development. While this prediction especially holds from a theoretical perspective based on endogenous growth theories, from an empirical perspective it is not easy to verify this causal link, though. The main reason for this diffi culty is that it is hard to measure whether transport infrastructure is indeed the exogenous driver of regional development or whether it is rather an endogenous reflection of the higher transportation demand in prospering regions. In this paper, we analyse the long-run effect of port facilities on regional income levels in Germany. Since it is very likely that the “reversed causality” problem applies to our sample setting, we use an identification strategy that is based on exogenous longrun instruments. In particular, port facilities built before the industrial revolution (about 1850 in Germany) can be seen as an adequate instrument for current port infrastructure since they are exogenous to recent economic development. Using German regional data for 1991–2008, our results hint at a positive correlation between port locations and regional per capita GDP, but do not provide evidence for a causal relationship. For the regional variation of population levels as a more general indicator for agglomeration effects, the causal relationship running from port infrastructure provision to increasing population levels holds nonetheless. |
| Keywords: | Port infrastructure; regional income; causal effects; IV |
| JEL: | C26 R12 R40 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0420&r=tre |
| By: | Henrik Braconier; Mauro Pisu |
| Abstract: | Several studies have reported a large negative effect of national borders on the volume of trade. We provide new estimates of the border effect for continental Europe using road rather than great circle – or “as-crows-fly” – distance. Road distances for 48 180 European city pairs have been extracted from Bing Maps Routing Services. As our dataset also has information on travel time, we are able to consider costs related to time in addition to those depending on distance. We find that for the same great circle distance and the same city size, the road distance between two cities located in the same country is around 10% shorter than that between cities located in different ones. Travel speed is also higher between cities in the same country. We find that by using measures based on the actual road distance rather than the great circle distance, the negative effect of international borders on goods trade in a standard gravity equation is lowered by around 15%. Time-related trade costs account for an additional 10% reduction in the border effect. Overall these results point to the importance of road networks – and road transport policy in general – to enhance market integration.<P>La connectivité routière et l'effet frontière : données concernant l'Europe<BR>Plusieurs études font état d’un effet négatif très prononcé des frontières nationales sur le volume des échanges. Nous livrons de nouvelles estimations de l’effet frontière en Europe continentale en utilisant les distances routières au lieu des distances orthodromiques – c’est-à-dire « à vol d’oiseau ». Les distances routières de 48 180 paires de villes européennes sont issues du service de calcul d’itinéraires de Bing Cartes. Étant donné que notre ensemble de données comporte aussi des informations sur les temps de trajet, nous sommes en mesure de prendre en compte les coûts liés au temps, en plus de ceux qui dépendent de la distance. Nous constatons qu’à distance orthodromique et taille d’agglomération égales, la distance routière entre deux villes d’un même pays est inférieure de 10 % environ à celle qui sépare des villes situées dans des pays différents. De même, la distance est parcourue plus rapidement lorsque les villes se trouvent dans le même pays. Nous observons qu’en utilisant des mesures établies sur la distance routière effective, plutôt que sur la distance orthodromique, l’effet négatif des frontières internationales sur les échanges de marchandises dans une équation de gravité standard diminue d’environ 15 %. Les coûts des échanges liés à la durée des trajets sont à l’origine d’une réduction supplémentaire de 10 % de l’effet frontière. Dans l’ensemble, ces résultats font ressortir l’importance des réseaux routiers – et de la politique du transport routier en général – pour renforcer l’intégration des marchés. |
| Keywords: | international trade, distance, gravity, road transport, travel time, transport routier, échanges internationaux, distance, temps de trajet, gravité |
| JEL: | F14 F15 R49 |
| Date: | 2013–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1073-en&r=tre |
| By: | Celbis, Mehmet Güney (UNU-MERIT / MGSoG, Maastricht University); Nijkamp, Peter (Vrije Universiteit Amsterdam); Poot, Jacques (University of Waikato) |
| Abstract: | Low levels of infrastructure quality and quantity can create trade impediments through increased transport costs. Since the late 1990s an increasing number of trade studies have taken infrastructure into account. The purpose of the present paper is to quantify the importance of infrastructure for trade by means of meta-analysis and meta-regression techniques that synthesize various studies. The type of infrastructure that we focus on is mainly public infrastructure in transportation and communication. We examine the impact of infrastructure on trade by means of estimates obtained from 36 primary studies that yielded 542 infrastructure elasticities of trade. We explicitly take into account that infrastructure can be measured in various ways and that its impact depends on the location of the infrastructure. We estimate several meta-regression models that control for observed heterogeneity in terms of variation across different methodologies, infrastructure types, geographical areas and their economic features, model specifications, and publication characteristics. Additionally, random effects account for between-study unspecified heterogeneity, while publication bias is explicitly addressed by means of the Hedges model. After controlling for all these issues we find that a 1 per cent increase in own infrastructure increases exports by about 0.6 per cent and imports by about 0.3 per cent. Such elasticities are generally larger for developing countries, land infrastructure, IV or panel data estimation, and macro-level analyses. They also depend on the inclusion or exclusion of various common covariates in trade regressions |
| Keywords: | Infrastructure, Trade, Transportation, Communication, Public Capital, Public Goods, Meta-Analysis |
| JEL: | O18 F10 H54 R53 C10 F19 R49 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2013032&r=tre |
| By: | Chantal C. Cantarelli; Bent Flyvbjerg; S{\o}ren L. Buhl |
| Abstract: | Cost overruns in transport infrastructure projects know no geographical limits, overruns are a global phenomenon. Nevertheless, the size of cost overruns varies with location. In the Netherlands, cost overruns appear to be smaller compared to the rest of the world. This paper tests whether Dutch projects perform significantly better in terms of cost overruns than other geographical areas. It is concluded that for road and tunnel projects, the Netherlands performs similarly to the rest of the world. For rail projects, Dutch projects perform considerably better, with projects having significantly lower percentage cost overruns in real terms (11%) compared to projects in other North West European countries (27%) and in other geographical areas (44%). Bridge projects also have considerably smaller cost overruns: 7% in the Netherlands compared with 45% in other NW European countries and 27% in other geographical areas. In explaining cost overruns, geography should therefore clearly be taken into consideration. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1307.2181&r=tre |
| By: | Chantal C. Cantarelli; Bert van Wee; Eric J. E. Molin; Bent Flyvbjerg |
| Abstract: | Cost overruns on Dutch transportation infrastructure are substantially lower than in other countries. This paper examines three independent variables and their relation with cost overrun in order to decide whether this is different for Dutch infrastructure projects compared to worldwide findings. The three independent variables are project type (road, rail, and fixed link projects), project size (measured in terms of estimated costs) and the length of the project implementation phase. For Dutch projects, average cost overrun is 10.6% for rail, 18.6% for roads and 21.7% for fixed links. This is the opposite of worldwide findings where rail has the largest overrun. For project size, small Dutch projects have the largest average percentage cost overruns but in terms of total overrun, large projects have a larger share. Worldwide research showed that cost overruns are large for all project sizes. The length of the implementation phase and especially the length of the pre-construction phase are important determinants of cost overruns in the Netherlands. With each additional year of pre-construction, percentage cost overrun increases by five percentage points. In contrast, the length of the construction phase has hardly any influence on cost overruns. This is an important contribution to current knowledge about cost overruns, because the period in which projects are most prone to cost overruns is narrowed down considerably, at least in the Netherlands. This means that period can be focused on to determine the causes and cures of overruns. Regarding the three determinants, it was again concluded that Dutch projects perform differently compared to the worldwide pattern, showing again the risk of ecological fallacy. It is therefore important to consider individual countries and to compare countries. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1307.2179&r=tre |
| By: | Cooper, Douglas L; Ragland, David R; Felschundneff, Grace |
| Abstract: | The only way to absolutely prevent all drivers from going around lowered gates at level rail-highway crossings is to make it physically impossible, or at least very difficult, for them to do so. While there are various options to accomplish this (constructing a separation of grade, closing the crossing, or deploying an impenetrable concrete barrier), most have high monetary or social costs. Alternative approaches—such as channelization devices and long-arm gates—while not 100 percent effective, can be used to prevent deaths and injuries while remaining economically feasible. Research has shown that the addition of channelization devices can dramatically reduce the number of violations at level rail-highway crossings. While long-arm gates appear to be effective, additional study is needed to determine their suitability for individual locations. Unfortunately, even when overall rail crash totals for the country or for a given state are high, crashes at specific crossings are relatively rare events, making it extremely difficult to show that the addition of a safety treatment at a particular site prevented a crash. However, based on the efficacy of channelization devices—75 percent—in addition to the experiences of various transportation agencies, these devices appear to be a viable, low cost safety upgrade for at-grade crossings. |
| Keywords: | Transportation and Highway Engineering |
| Date: | 2013–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsrrp:qt9vn6j0x3&r=tre |
| By: | André De Palma (ENS Cachan - Ecole Normale Supérieure de Cachan - École normale supérieure de Cachan - ENS Cachan); Stef Proost (Center for Economic Studies - CES - KU Leuven - CES - KU Leuven); Saskia Van Der Loo (Center for Economic Studies - CES - KU Leuven - CES - KU Leuven) |
| Abstract: | We use a simple economy with two interconnected geographical zones. Individuals can live and work in one of the two zones or can commute between them. This model is used to explore the dynamics of housing and work decisions after a permanent shock in labour demand occurred in one of the two zones. We illustrate the role of the different levels of expectation of developers and government transport agencies for the equilibrium on the housing and the labour markets. The model is used to identify better Cost-Benefit rules for transport invest-ments and the role of coordination between housing and transport decisions. |
| Keywords: | urban economics, transport, housing, dynamic land use |
| Date: | 2013–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00841105&r=tre |
| By: | Chantal C. Cantarelli; Eric J. E. Molin; Bert van Wee; Bent Flyvbjerg |
| Abstract: | Using a methodology similar to that used the in the worldwide research, the cost performance of Dutch large-scale transport infrastructure projects is determined. In the Netherlands, cost overruns are as common as cost underruns but because cost overruns are larger than cost underruns projects on average have a cost overrun of 16.5%. The focus on one country further enabled to consider cost overruns during different project development phases. It turned out that in the Netherlands the majority of the cost overrun occurs in the pre-construction phase (the period between the formal decision to build and the start of construction). The frequency as well as the magnitude of pre-construction cost overrun is significantly higher than in the construction phase. The used methodology of calculating cost overruns does however not take lock-in into account. This phenomenon shows that the real decision to build was taken much earlier in the decision-making process. Since estimated costs are usually lower during these earlier stages, the cost overruns based on this real decision to build are likely to be much higher. Cost overruns presented in studies are therefore often underestimated and the problem of cost overruns is much larger than we think. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1307.2178&r=tre |
| By: | Olischer, Florian Thomas; Dörrenbächer, Christoph |
| Abstract: | This paper examines the European low-cost airline industry by analysing how the rise of low-cost carriers (LCCs) has influenced the relationship between airlines and airports. Publicly funded infrastructure is a necessary precondition for any business, and utilization charges are an important cost issue for firms, especially in the transportation industry. While cost cutting is an integral part of every business model, LCCs excessively focus on low costs, with airport charges being an important target for cost cutting measures. In order to drive down airport charges and shape airport services to fit its low cost business model, Ryanair has threatened to relocate and/or withdraw routes several times. This paper looks into such processes of concession bargaining and aims to uncover how LCCs put themselves into the position to gain a degree of market power, which make them important actors shaping the macro-political system around the aviation industry. -- Flughafengebühren sind ein wesentlicher Kostenblock in der Luftfahrtindustrie. Für Low-Cost-Carrier (Billigflieger) sind sie deshalb ein wichtiger Ansatzpunkt ihrer auf Kostenführerschaft ausgerichteten Strategie. Um Gebühren zu senken und um den Service von Flughäfen ihrem Geschäftsmodell anzupassen, hat Ryanair in der jüngeren Vergangenheit häufiger gedroht, Flugrouten einzustellen oder zu verlagern. Die Untersuchung der mit solchen Verlagerungsdrohungen einhergehenden Verhandlungen zeigt, dass Low-Cost-Carrier häufig auf ein sie begünstigendes Machtungleichgewicht zurückgreifen können. Dieses speist sich aus vier Quellen: (1) aus der Verfügbarkeit von sog. Secondary Airports, (2) aus der häufig gegebenen Abhängigkeit der Secondary Airports von wenigen Fluggesellschaften, (3) aus der grundsätzlichen Unsicherheit über das Marktpotential eines Flughafens und (4) aus der relativen Einfachheit mit der Verlagerungsprozesse in der Luftfahrtindustrie vollzogen werden können. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:imbwps:73&r=tre |
| By: | Chantal C. Cantarelli; Bent Flybjerg; Eric J. E. Molin; Bert van Wee |
| Abstract: | Managing large-scale transportation infrastructure projects is difficult due to frequent misinformation about the costs which results in large cost overruns that often threaten the overall project viability. This paper investigates the explanations for cost overruns that are given in the literature. Overall, four categories of explanations can be distinguished: technical, economic, psychological, and political. Political explanations have been seen to be the most dominant explanations for cost overruns. Agency theory is considered the most interesting for political explanations and an eclectic theory is also considered possible. Nonpolitical explanations are diverse in character, therefore a range of different theories (including rational choice theory and prospect theory), depending on the kind of explanation is considered more appropriate than one all-embracing theory. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1307.2176&r=tre |
| By: | Daniel Bernhofen; Zouheir El-Sahli; Richard Kneller |
| Abstract: | We quantify the effects of the container revolution on a large panel of product level trade flows during 1962-1990. We exploit time and cross-sectional variation in countries’ first adoption of container facilities to construct a time-varying bilateral container technology variable and estimate its effects on trade in the panel. On North-North trade, the cumulative average treatment effects of containerization over a 20 year time period amount to about 700%, can be interpreted as causal and are larger than the standard policy liberalization variables. In a nutshell, we provide the first econometric evidence for containerization to be a driver of 20th century economic globalization. |
| Keywords: | containerization, 20th century global transportation infrastructure. |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:13/02&r=tre |
| By: | Tchouamou Njoya, Eric |
| Abstract: | Tourism is increasingly being promoted as an important source of economic growth especially in developing countries. While there are many elements that contribute to tourism growth, without an efficient air transport system, it is almost impossible for a number of landlocked and geographically isolated developing nations to expand and sustain domestic and international tourism. From the perspective of an African nation the most important question is whether the benefit of aviation expansion would have any superiority in poverty reduction. This paper seeks to (1) investigate the relationship between air transport and tourism growth especially in selected African countries and (2) highlight ways and means of capturing and strengthening air transport and tourism industry’s contribution. To achieve these objectives the research uses a combination of literature review and case study analyses. It concludes that efficient air transport can act as a facilitator in the development of more diversified export-based industries, away from over-reliance on natural resources, which in the presence of linkages with other domestic economic sectors can act as a stimulus for broadly based growth. |
| Keywords: | air transport, tourism, Sub-Saharan Africa, Kenya, Ethiopia, South Africa, Yamoussoukro Decision |
| JEL: | L5 |
| Date: | 2013–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48017&r=tre |
| By: | Chantal C. Cantarelli; Bent Flybjerg; Bert van Wee; Eric J. E. Molin |
| Abstract: | Lock-in, the escalating commitment of decision-makers to an ineffective course of action, has the potential to explain the large cost overruns in large scale transportation infrastructure projects. Lock-in can occur both at the decision-making level (before the decision to build) and at the project level (after the decision to build) and can influence the extent of overruns in two ways. The first involves the methodology of calculating cost overruns according to the formal decision to build. Due to lock-in, however, the real decision to build is made much earlier in the decision-making process and the costs estimated at that stage are often much lower than those that are estimated at a later stage in the decision-making process, thus increasing cost overruns. The second way that lock-in can affect cost overruns is through practice. Although decisions about the project (design and implementation) need to be made, lock-in can lead to inefficient decisions that involve higher costs. Sunk costs (in terms of both time and money), the need for justification, escalating commitment, and inflexibility and the closure of alternatives are indicators of lock-in. In this paper, two case studies, of the Betuweroute and the HSL-South projects in the Netherlands, demonstrate the presence of lock-in and its influence on the extent of cost overruns at both the decision-making and project levels. This suggests that recognition of lock-in as an explanation for cost overruns significantly contributes to the understanding of the inadequate planning process of projects and allows development of more appropriate means. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1307.2177&r=tre |
| By: | KITANO Taiju |
| Abstract: | The US government criticized Japanese environmental policies, which promoted eco-friendly car (eco-car) purchases via measures such as tax exemptions and subsidies, as disguised forms of protection by arguing that the fuel economy standard for the subsidy qualification was designed to be more beneficial to domestic firms. This paper examines Japanese environmental policies from 2005-2009 to assess whether or not they were adequately formulated from an environmental perspective. The analysis compares the outcomes between the actual fuel economy standard for subsidy qualification introduced in Japan and an alternative standard suggested by the US government. Simulation results based on the structural econometric model of multi-product oligopolistic competition show that although both alternative and actual standards are comparable for the average fuel economy of new cars sold, the former is inefficient in improving the fuel economy because it requires much larger subsidies to achieve the same average fuel economy level as that of the latter. |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:13059&r=tre |
| By: | David C Broadstock (Research Institute of Economics and Management (RIEM), Southwestern University of Finance and Economics, Sichuan, China and Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey, UK.); Eleni Papathanasopoulou (Plymouth Marine Laboratory, Prospect Place The Hoe, Plymouth, PL1 3DH, UK.) |
| Abstract: | This paper explores the relative importance of factors other than price and income in explaining gasoline demand in Greece between 1978 and 2008. Using a structural time series model (STSM) the long-run elasticities of income and price are 0.45 and -0.32 respectively. Further, it is shown using the estimated underlying energy demand trend (UEDT) that other exogenous factors have been shifting the gasoline demand curve to the right, thus reflecting more energy intensive lifestyles in Greece. Given the results it is contended that the kinds of policies that governments can use to manage gasoline demand and move towards sustainable transportation go beyond the usual price mechanism. |
| Keywords: | Motor-gasoline Demand, Sustainable Transportation, Underlying Energy Demand Trend, Household Car Use |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:sur:seedps:141&r=tre |
| By: | André DE PALMA; Moez KILANI; Stefan PROOST |
| Abstract: | This paper proposes an analytical formulation of discomfort in mass transit and discusses its micro-economic properties. The formula we introduce reflects real situations faced by the passengers, it has nice mathematical properties and it is easy to compute. The discomfort formulation is used to analyze optimal scheduling and pricing of transit in a dynamic model. |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces13.01&r=tre |
| By: | Manuela Alcañiz (Department of Econometrics, Riskcenter-IREA, University of Barcelona, Spain); Montserrat Guillén (Department of Econometrics, Riskcenter-IREA, University of Barcelona, Spain); Daniel Sánchez-Moscona (Department of Econometrics, Riskcenter-IREA, University of Barcelona, Spain.); Miguel Santolino (Department of Econometrics, Riskcenter-IREA, University of Barcelona, Spain.); Oscar Llatje (Catalan Traffic Authority, Spain); Lluís Ramon (Catalan Traffic Authority, Spain) |
| Abstract: | Sobriety checkpoints are not usually randomly located by traffic authorities. As such, information provided by non-random alcohol tests cannot be used to infer the characteristics of the general driving population. In this paper a case study is presented in which the prevalence of alcohol-impaired driving is estimated for the general population of drivers. A stratified probabilistic sample was designed to represent vehicles circulating in non-urban areas of Catalonia (Spain), a region characterized by its complex transportation network and dense traffic around the metropolis of Barcelona. Random breath alcohol concentration tests were performed during spring 2012 on 7,596 drivers. The estimated prevalence of alcohol-impaired drivers was 1.29%, which is roughly a third of the rate obtained in non-random tests. Higher rates were found on weekends (1.90% on Saturdays, 4.29% on Sundays) and especially at night. The rate is higher for men (1.45%) than for women (0.64%) and the percentage of positive outcomes shows an increasing pattern with age. In vehicles with two occupants, the proportion of alcohol-impaired drivers is estimated at 2.62%, but when the driver was alone the rate drops to 0.84%, which might reflect the socialization of drinking habits. The results are compared with outcomes in previous surveys, showing a decreasing trend in the prevalence of alcohol-impaired drivers over time. |
| Keywords: | Breath alcohol concentration, blood alcohol content, drunk driving, sampling analysis, weights, substance abuse |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2013-05&r=tre |
| By: | Yuval Kantor (VU University); Piet Rietveld (VU University); Jos van Ommeren (VU University) |
| Abstract: | Mixed commercial and residential land use is observed in most cities around the world. This is in contrast to a myriad of bid rent models, which predict that mixed land use does not occur. The main exception are the models by Fujita and Ogawa (1982) and Lucas and Rossi-Hansberg (2002) that predict the presence of a very restrictive type of mixed land use. The latter study derives the equilibrium distribution of residential and commercial land uses while allowing for endogenous agglomeration externalities. We extend this model by introducing a traffic congestion externality. We show that congestion induces a general type of mixed land use zone, which is comparable to the type of zone assumed in the model of Wheaton (2004). The interplay between these externalities is then demonstrated, as reduced congestion leads to commercial concentration and agglomeration gains. |
| Keywords: | land use, congestion, agglomeration, externalities |
| JEL: | R13 |
| Date: | 2013–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20130084&r=tre |
| By: | Chantal C. Cantarelli; Caspar G. Chorus; Scott W. Cunningham |
| Abstract: | Strategic behaviour is one of the main explanations for cost overruns. It can theoretically be supported by agency theory, in which strategic behaviour is the result of asymmetric information between the principal and agent. This paper gives a formal account of this relation by a signalling game. This is a game with incomplete information which considers the way in which parties anticipate upon other parties' behaviour in choosing a course of action. The game shows how cost overruns are the result of an inappropriate signal. This makes it impossible for the principal to distinguish between the types of agents, and hence, allows for strategic behaviour. It is illustrated how cost overruns can be avoided by means of two policy measures, e.g. an accountability structure and benchmarking. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1307.2180&r=tre |
| By: | Llanto, Gilberto M.; Zen, Fauziah |
| Abstract: | This paper discusses governmental fiscal support for financing long-term infrastructure projects in ASEAN countries. More specifically, it discusses the role of guarantees and subsidies in promoting public-private partnership (PPP) projects. It draws on case studies of Philippine and Indonesian PPPs, and information from secondary sources to highlight the critical role of such fiscal support in making feasible the financing of long-term infrastructure projects that may be economically beneficial but commercially or financially unviable without such support. The paper points out the need for a strong fiscal position and analyzes the implications of guarantees and subsidies on fiscal management. An important insight is the need to secure budgets for long-term infrastructure projects, which may be done through a medium-term expenditure framework. Based on the analysis of Philippine and Indonesian case studies, it provides specific recommendations to improve the implementation of PPP projects. |
| Keywords: | infrastructure, subsidy, government guarantee, Philippines, public-private partnership (PPP), concessions, fiscal space, contingent liabilities, affermage, turnkey contracts, medium-term expenditure framework |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2013-08&r=tre |
| By: | Dave Donaldson; Richard Hornbeck |
| Abstract: | This paper examines the historical impact of railroads on the American economy. Expansion of the railroad network may have affected all counties directly or indirectly – an econometric challenge that arises in many empirical settings. However, the total impact on each county is captured by changes in that county's “market access,” a reduced-form expression derived from general equilibrium trade theory. We measure counties' market access by constructing a network database of railroads and waterways and calculating lowest-cost county-to-county freight routes. As the railroad network expanded from 1870 to 1890, changes in market access were capitalized into county agricultural land values with an estimated elasticity of 1.1. County-level declines in market access associated with removing all railroads in 1890 are estimated to decrease the total value of US agricultural land by 64%. Feasible extensions to internal waterways or improvements in country roads would have mitigated 13% or 20% of the losses from removing railroads. |
| JEL: | F1 N01 N51 N71 O1 R1 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19213&r=tre |