Growth or Displacement? A Metro Line's Causal Impact on the Spatial Distribution of Firms and Employment: Evidence from London

This paper uses data on the location of business units and employment in London to estimate the impact of a new metro line on the spatial distribution of economic activity. The authors' business units level dataset allows them to track the movement of units across space and time, making it possible to estimate the growth and displacement component of the impact. In addition to standard panel fixed effect methods, the authors employ a planned-route instrumental variables methodology which uses planned but abandoned metro alignments. The authors find that areas within walking distance to stations experience a significant positive effect (3.6% more business units and 2.5% more employment), whereas areas further off but still within 2000 meters experience a significant negative impact (−1.3% for business units and−3% for employment). This result provides empirical evidence for the models of both Fujita et al. (1) and Redding and Turner (2) as areas close to the transport scheme but not subject to it are worse off than areas further away. The results suggest that the metro created no new jobs or business units, the scheme merely shifted economic activity closer to the stations. However, sectoral mix changed significantly, favouring high-value-added business sector employment, suggesting that productivity may have increased.

• Supplemental Notes:
  • This paper was sponsored by TRB committee ADD10 Standing Committee on Transportation and Economic Development.
• Corporate Authors:

  Transportation Research Board

  ,    
• Authors:
  • Pogonyi, Csaba G
  • Graham, Daniel J
  • Carbo, Jose M
• Conference:
  • Transportation Research Board 98th Annual Meeting
  • Location: Washington DC, United States
  • Date: 2019-1-13 to 2019-1-17
• Date: 2019

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; References; Tables;
• Pagination: 17p

Subject/Index Terms

• TRT Terms: Businesses; Economic development; Economic impacts; Employment; Public transit; Rail transit
• Geographic Terms: London (England)
• Subject Areas: Economics; Public Transportation; Railroads;

Filing Info

• Accession Number: 01697811
• Record Type: Publication
• Report/Paper Numbers: 19-03039
• Files: TRIS, TRB, ATRI
• Created Date: Mar 1 2019 3:51PM