Aggregate and Regional Economic Eff ects of New Railway Infrastructure

Wolfgang Polasek, Wolfgang Schwarzbauer, Richard Sellner

Abstract


Economists expect positive returns to investments in infrastructure. However a project
with higher national returns might have less favorable effects on a regional level than the
alternative. Therefore new infrastructure should also be assessed on a regional level, but
econometric evaluation models are scarce, especially in regional science. This paper proposes
new approaches to evaluate infrastructure by a dynamic spatial econometric model
that allows long-term predictions. We investigate the regional effects for 2 Austrian railway
projects and show that infrastructure returns are positive on an aggregate and at a
regional level, and spatial variation can be large.

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