Pilegaard, Ninette and Fosgerau, Mogens (2008): Cost benefit-analysis of a transport improvement in the case of search unemployment. Published in: Journal of Transport Economics and Policy , Vol. 42, No. 1 : pp. 23-42.
Download (268kB) | Preview
We examine the implications of search unemployment for the evaluation of a transport in-vestment in a conventional cost benefit analysis (CBA) assuming perfect competition. Lower transport costs induces search over a larger area and longer commuting distances. The ex-pected duration of vacancies is reduced with ensuing benefits outweighing the loss to in-creased transport. The search imperfection drives a wedge between the marginal product of labour and the wage, such that the final benefits of a transport improvement exceed those of a conventional CBA. Using a simulation model we find these additional benefits may be sub-stantial.
|Item Type:||MPRA Paper|
|Original Title:||Cost benefit-analysis of a transport improvement in the case of search unemployment|
|Keywords:||Cost-benefit; transport; search unemployment; welfare|
|Subjects:||R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics > R42 - Government and Private Investment Analysis ; Road Maintenance ; Transportation Planning|
|Depositing User:||Mogens Fosgerau|
|Date Deposited:||14. Aug 2008 23:56|
|Last Modified:||16. Feb 2013 05:02|
Albæk, K. and B. E. Sørensen (1998), ‘Worker Flows and Job Flows in Danish Manufactur-ing, 1980-91’, The Economic Journal, 108, 1750-1771.
Davis, S. J., J. C. Haltiwanger and S. Schuh (1996), Job Creation and Destruction, MIT Press, Cambridge, Massachusetts
DETR (1999), Transport and the Economy, The Standing Advisory Committee on Trunk Road Assessment (SACTRA), Department of the Environment, Transport and the Regions (DETR), London
Fujita, M., P. Krugman and A. J. Venables (2000), The Spatial Economy, Cambridge, MA, MIT Press.
Fosgerau, M. and N. B. Kristensen (2005), ‘Who Gains? Allocation of Freight Transport User Benefits From International Infrastructure Projects in Multi-Country CBA’, Transportation Research Record, 1906, 19-25.
Jara Diaz, S. R. (1986), ‘On the Relation between Users’ Benefits and the Economic Effects of Transportation Activities’, Journal of Regional Science, 26 (2), 379-391.
Kidokoro, Y. (2004), ‘Cost- Benefit Analysis for Transport Networks – Theory and Applica-tion’, Journal of Transport Economics and Policy, 38 (2), 275-307.
Knoflacher, H. (2003), ‘The role of modal split’, Proceedings of the 16th International Sym-posium on Theory and Practice in Transport Economics, ECMT, Budapest.
Krugman, P. (1991), ‘Increasing Returns and Economic Geography’, Journal of Political Economy, 99, 483-499.
Pilegaard, N. (2003), A Model of Endogenous Unemployment and Commuting, Proceedings of the European Transport Conference 2003, Strasbourg, France.
Pissarides, C. A. (1990), Equilibrium Unemployment Theory, Basil Blackwell.
Pissarides, C. A. (2000), Equilibrium Unemployment Theory, second edition, MIT Press, Cambridge, Massachusetts.
Statistics Denmark (2004), Statistical ten year review 2004 (in Danish), Statistics Denmark, København.
Venables, A. J. (2007), ‘Evaluating urban transport improvements: cost-benefit analysis in the presence of agglomeration’, forthcoming in Journal of Transport Economics and Policy.
Venables, A. J. and M. Gasiorek (1999), The Welfare Implications of Transport Improve-ments in the Presence of Market Failure, Report to SACTRA, DETR, London.