The economic value of transport infrastructure in the UK: an input-output analysis

Abstract

Listen

Translate article

Transport infrastructure systems operate in, and are shaped by, the specific context in which they are expected to perform, contribute to the system-of-systems that support civilised life, and thy must strive to be sustainable and resilient. However, transport, one of the ‘economic infrastructures’, is viewed narrowly in political circles as a vehicle for economic prosperity: political focus falls on the economic pillar of sustainability. One perennial challenge, addressed herein, concerns the inclusion of social and environmental value into such performance judgements. A deep understanding of system interdependencies is essential when comparing input-output tables (a top-down approach) with cost-benefit analysis (CBA, a bottom-up approach). CBA works best when there is adequate information to calculate a monetary value for all economic, social and environmental outcomes, whereas input-output tables are most effective when environmental and social value are kept distinct from economic value, and where the beneficial economic impacts extend across multiple sectors (CBA is inadequate in this regard). This research uses the World Input-Output Database and principal component analysis (PCA) to develop a model to capture this complex accounting process. In recognising how past interdependencies inform future development, this study's model provides new insights into indirect economic value creation within infrastructure systems.