Assessing the wider economy impacts of transport infrastructure investment with an illustrative application to the north-west rail link project in Sydney, Australia

Abstract

This paper identifies the employment agglomeration impact of transport investments through a measure of change in effective employment density, using new empirical estimates of the elasticity of productivity with respect to effective density in order to calculate the uplift in benefits (or impact) from this key wider economy impact. The approach combines the behavioural richness of an integrated transport and location choice modelling system (TRESIS) and its outputs to a spatial computable general equilibrium model (SGEM), which uses data at a more aggregate level to compute the additional impacts of transport infrastructure change on the wider economy. This has allowed the development of an integrated transport-location-economywide model system known as TRESIS-SGEM. The model system is applied to the introduction of the North-West Rail Link project in Sydney, Australia to illustrate the capability of TRESIS-SGEM, identifying a 17.6% markup over the conventional transport user benefit.