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on Transport Economics |
| By: | Edward L. Glaeser; Giacomo A.M. Ponzetto |
| Abstract: | Will politics lead to over-building or under-building of transportation projects? In this paper, we develop a model of infrastructure policy in which politicians overdo things that have hidden costs and underperform tasks whose costs voters readily perceive. Consequently, national funding of transportation leads to overspending, since voters more readily perceive the upside of new projects than the future taxes that will be paid for distant highways. Yet when local voters are well-informed, the highly salient nuisances of local construction, including land taking and noise, lead to under-building. This framework explains the decline of urban mega-projects in the US (Altshuler and Luberoff 2003) as the result of increasingly educated and organized urban voters. Our framework also predicts more per capita transportation spending in low-density and less educated areas, which seems to be empirically correct. |
| JEL: | D72 D82 H54 H76 R42 R53 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23686&r=tre |
| By: | P. Charnoz; C. Lelarge; C. Trevien |
| Abstract: | We document the impact of travel time between headquarters and affiliates of geographically dispersed corporate groups on the management of such business organizations. Theory suggests that the easier circulation of managers might facilitate the transmission of information between production plants and headquarters, thus fostering growth and functional specialization (on production activities) at remote affiliates and decreasing operational costs at the group level. We test these predictions on the population of French corporate groups, using the expansion of the High Speed Rail network as a shock on internal travel times. We estimate that HSR induced the creation of one production job for the average affiliate in the service industries (against 0.2 job in retail, trade or manufacturing industries), and the shift of around one managerial job from affiliate to HQ. At the group level, descriptive regressions suggest that the impact on the operational profit margin is around 0.5 percentage points in most industries. |
| Keywords: | Communication costs, headquarters, firm organization, public infrastructure, highspeed rail. |
| JEL: | R30 L22 R40 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:635&r=tre |
| By: | Morgan Kelly; Cormac Ó Gráda |
| Abstract: | Against the consensus that sailing ship technology was stagnant during the early Industrial Revolution, we find striking improvements in safety at sea. Between 1760 and 1825, the risk of being wrecked for Atlantic shipping fell by one third, and of foundering by two thirds, reflecting improvements in seaworthiness and navigation respectively. Seaworthiness improved through replacing the traditional stepped deck ship with stronger flushed decked ones derived from Indian designs, and the increasing use of iron reinforcement. Improved navigation owed little to precise longitude estimation and stemmed mostly from accurate charts and instruments, and accessible manuals of navigational technique. |
| Keywords: | Technological progress; Shipping |
| JEL: | N0 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201711&r=tre |
| By: | Panle Jia Barwick; Shengmao Cao; Shanjun Li |
| Abstract: | While China has made great strides in transforming its centrally-planned economy to a market-oriented economy, there still exist widespread interregional trade barriers, such as policies and practices that protect local firms against competition from non-local firms. This study documents the presence of local protectionism and quantifies its impacts on market competition and social welfare in the context of China’s automobile market. This market exhibits a salient feature that vehicle models by joint ventures (JVs) and especially state-owned enterprises (SOEs) command much higher market shares in their headquarter province than at the national level. Through spatial discontinuity analysis at provincial borders, falsification tests, and consumer surveys, we first confirm protective policies such as subsidies to local brands as the primary contributing factor. We then set up and estimate a market equilibrium model to quantify the impact of local protection, controlling for other demand and supply factors. Counterfactual simulations show that local protection leads to significant choice distortions, resulting in 18.7 billion yuan of consumer welfare loss, amounting to 40% of total subsidy. Provincial governments face a prisoner’s dilemma: according to our estimates, local protection reduces aggregate social welfare, but the provincial governments have no incentive to unilaterally remove local protection. |
| JEL: | D04 D6 F15 H2 L1 L5 L62 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23678&r=tre |
| By: | Evangelia Kasimati (Bank of Greece); Nikolaos Veraros (King’s College London) |
| Abstract: | Participants in the maritime industry place much interest in the Forward Freight Agreements (FFA/FFAs), being an indispensable tool for hedging shipping freight risk. Our paper innovates by directly comparing the FFA predictions with their actual future settlement prices as well as by examining contracts going forward as far as next calendar year. We combine straightforward comparison measurements with cointegration analysis to test for the accuracy and efficiency of the FFA projections. We find that FFAs display limited usefulness in predicting future freights, only slightly superior than simple naive models. The shorter the contract period and the smaller the vessel the better the forecast. We also find FFAs being relatively good predictors of future market direction but missing the turning points of the market cycles. |
| Keywords: | Shipping; Freight Rates; Forward Freight Agreements; Forecasting; Vector Error Correction Models |
| JEL: | C32 G13 G14 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:bog:wpaper:230&r=tre |