CP6351- Transportation and Economic Development

Course Description

This course is designed to expose students to theory and methods that frame the expanding debate over the nature and extent of the links between transport and urban development. Cites are changing and so is the need to better articulate the impact of infrastructure investment on economic outcomes. The transport environment has evolved from a network of simple modes to highly interconnected and redundant systems that must be increasingly responsive to economic mandates at the international, national, state, regional, local and neighborhood levels.

Analysis and arguments have also changed in response to the new transport environment. There is no longer a focus on the simple conceptual and empirical links between traffic and land use. Debate now centers on all forms of transport and the range of land use considered has also been expanded to include new types of activities (e.g. distribution centers and business parks). Other factors must be considered including the role of the public sector in financing infrastructure, private sector initiatives, impacts on employment and the local economy, quality of life, environmental degradation and social and cultural impacts. In addition, there is the need to consider improved methods of analysis and evaluation. The links between transport and urban development have fundamentally changed as illustrated by the physical, economic, social, and financial shifts in our society at large. Two primary challenges are the impact of the auto on urban America and the need to forecast the location, occurrence and magnitude of development activities.

The planning framework has also changed and has been subject to the dominance of market forces in the 1980s and 1990’s. This has reduced the sole reliance on long-term strategic development plans for cities and introduced the need for greater flexibility and guidance while giving citizens the opportunity to articulate a vision for their city and neighborhood. Concerns over the quality of life and employment, social, and cultural opportunities within the city are paramount. Planners must be acquainted with both the economic and transportation literature and methods in order to better the address the question of transportation/economic interaction.

The course is organized into two primary sections. The first half of the semester focuses on describing the environment. Students examine the theoretical and analytical issues from an economic and spatial perspective. This establishes the basic theoretical and empirical links between transport and urban development. This includes an examination of the argument that there is no effect from public capital investment on private sector productivity or output for large geographic areas (i.e. it is a transfer). This may be totally different for smaller geographic areas. The question of scale is introduced in order to illustrate the challenges inherent in measuring economic output and productivity.

The second part of the course explores a range of case studies of transport and development concentrating in turn on all forms of transport - rail, air, water and road. Students review and are encouraged to challenge the basic assumptions implicit in much of the research on transport and urban development. The intent is to begin to assemble a research agenda for the future. The material used comes from a variety of sources representing different cultural or national perspectives. The precise relationships between transport investment and urban development are not well known, even theoretically. There seems to be no single methodology available to test the relationships, the counterfactual situation is difficult to determine and the questions of causality not addressed. Decisions have been based more on faith than understanding. Students taking the course will be better prepared to address these very difficult questions.
 

Lecture Schedule

I. The Spatial Links between Land Use, Development and Transport.
 

Some argue that the spatial behavior of firms and households relative to investment in the infrastructure is irrelevant at the macro level and critical at the micro level. The impact of spatial considerations makes a fundamental difference in methods used, approach, objectives, data requirements, etc. Students model the functional relationships between specific types of transport investment and economic development at the state, regional, city, neighborhood and facility level.
 

II. The Economic Debate and Increased Accessibility
 

Development benefits at the regional level accrue directly from improved accessibility. These may include attracting new firms to locate to the area, cheaper distribution of goods, enlarged labor supply, and increased land value. Counter arguments suggest that major investments, such as high speed rail links deliver minimal benefits to peripheral regions. The high speed rail network in Europe is used as a case study within which this issue is examined.
 

III. The Role of New Transport Infrastructure
 

The rise of new commercial activities at locations where modes intersect at an accessible interchange point provides an excellent backdrop within which to examine the role of infrastructure in generating new economic activity. Airports are attractive locations for science parks, conference and hotel facilities, and distribution centers to name a few. Students conduct analysis of specific facilities to determine their role in encouraging new development.
 

IV. System Redundancy and Economic Development
 

In the United States the transport infrastructure is a dense set of networks and any additional link is likely to improve mobility/accessibility marginally. Other factors become equally important in location and other economic decisions. Thus it is important to identify other primary considerations and assure their inclusion in any economic development strategy. Redistribution issues, unemployment, social concerns may become secondary considerations when making marginal improvements and the full array of possible outcomes economic and otherwise must be investigated. Students will examine the role of transport investment in meeting local area needs across a broad spectrum.
 

V. The Role of the "Free Rider"
 

 The private sector benefits greatly from investment in public infrastructure. This occurs at many levels for many actors including developers that benefit from increased accessibility to a local area or project while they do not contribute to the project. The attractiveness of joint development projects is increasing along with a greater need for them. These equity considerations exist at many other levels and between many other entities including the city and suburb.
 

VI. Fiscal and Taxation Policies
 

 Fiscal policies are a primary influence on location, land development, investment environment, and transport. The role of fiscal policies, taxing and spending, in influencing significant investment in infrastructure are examined.
 

 VII. The Fully Integrated Transport Market
 

To achieve a fully integrated transport market where all modes operate efficiently and in concert may be one means of achieving the maximum development benefits from the transportation system. This requires an assessment of the potential contribution of each mode to urban development as well as combinations of modes. Transportation investment decisions are urban development decisions and transport evaluations must include an assessment of the proposal on land use and the geographic area at large. The evaluation methods to be used must consider all relevant costs and benefits relating to the natural, economic, and social environment. Students will use "The Community Impact Evaluation " (Lichfield, 1988 and 1994) method to evaluate different transport projects. This method goes beyond simple transport assessment to begin to account for the impact of the project on urban development. Other multicriteria methods will also be used.
 

 VIII. Linking Transport and Urban Development
 

 The most important link between economics and urban development is classical location theory, based on assumptions from land economics of optimality and equilibrium in land allocation. Causality is imputed if one assumes accessibility determines land value for different uses at different locations and as transport costs change, so do rent levels. Because land uses and rents are linked by market processes, land uses and urban development also change. Reduced transport costs allow consumers to trade off cheaper housing costs at the periphery against the higher transport costs. The same arguments can be made for businesses. Evolution theory argues that the initial growth of industry took place at particular locations and this attracted related economic activities to the location. Small scale activities in specific locations were replaced gradually over time with dominant and concentrated related activities at particular locations with competitive advantages. These dominant locations have links to the interior, natural resources, etc. however, they must keep pace with technology and other changes within the industry in order to maintain their competitive advantage. Models exist for location theory but not for evolution theory. Recent models combine location and mode choice while others focus on behavioral justification for location decisions. Students will evaluate these new methodological approaches and compare their outputs with those of the traditional models.
 

 IX. Causality, Transportation and Urban Development
 

 The ability to impute causality between urban development ant transportation is problematic. It is difficult to specify what would have happened if there had been no investment. Current modeling approaches do not permit us to isolate the impacts over time particularly for small increments. Students will review recent literature and methods focused on this topic.
 

X. Major Investment and New Distribution Networks
 

The New European motorway network is used as a case study to examine the rise of new distribution networks. High quality road network combines with technology to allow just in time delivery, computerized stock control and improved materials acquisition.