Regional repercussions of new transport infrastructure investments: An SCGE model analysis of wider economic impacts

Abstract

In this article, we analyse the wider economic impacts (WEI) of a large number of planned Norwegian transport infrastructure projects. WEI are welfare effects caused by imperfections in markets adjacent to the transport market and are additional to the transport user benefits calculated in a conventional cost-benefit analysis.A multiregional Spatial Computable General Equilibrium (SCGE) model is developed on the basis of data from sources such as the Norwegian national accounts by county, the Norwegian national transport modelling system, foreign trade statistics and the Norwegian commodity flow survey. The model departs from the assumption of constant returns to scale and perfect competition, taking into consideration commodity, commuting and migration flows between regions.Based on the large number of analysed projects, we are able to draw general conclusions about project specific characteristics leading to WEI of transport infrastructure investments and the expected relative size of these effects. The paper relates to the ongoing discussion on the link between infrastructure and economic growth, and illustrates how SCGE models can be used in transport appraisal.