Rail Transit and Economic Growth: Documenting Evidences from a Panel Data Analysis of Eighteen Metropolitan Areas in the United States

Many U.S. cities are making substantial investment in rail transit and promoting transit-oriente development in hopes of making neighborhoods transit accessible and economically vibrant. Previous empirical studies on the effects of transportation infrastructure on economic growth were mostly carried out at the macro level (e.g. country, state levels) where cross-sectional observations of aggregate output are regressed against private capital, labor and stock of transportation infrastructure. It is ever more critical to better understand the economic outcomes of transit improvements by addressing the highly localized nature of the impact. This study on 20 rail transit systems in 18 metropolitan areas in the United States aims to examine the effects of rail transit on employment growth through a design of panel data analysis. This study makes a unique contribution to the literature by performing the first nationwide panel analysis on this topic at the fine-grained census block level. The primary data source for measuring employment is the Longitudinal Employer-Household Dynamics Origin-Destination Employment Statistics (LODES) database from the US Census Bureau. The authors' main modeling framework is the fixed-effects model, which is applied to both the nationwide sample and individual metropolitan areas; the model is also applied to jobs of different sectors and different sample strata by the job/population ratio. Based on the nationwide sample, close proximity to rail transit does not significantly contribute to the total employment near the stations. The magnitude, sign and significance level of the effect vary largely among the different metropolitan areas; the effect is significantly positive in only four metropolitan areas. The impact is significantly positive for jobs of the service and retail & hospitality sectors, as well as for high-earning jobs. However, the impact is significantly negative for low- and medium-earning jobs. This study also reveals that the employment impact of rail transit depends largely on the baseline job/population ratio before the station opening. Areas with the ratio below 0.1022 (70th percentile on the ratio’s distribution) receive a positive and significant impact; the largest impact takes place in the range of 0.0005 ~ 0.1022 (50th ~ 70th percentile). The impact becomes non-significant when the ratio is higher than 0.1022 (70th percentile).

• Supplemental Notes:
  • This paper was sponsored by TRB committee ADD10 Standing Committee on Transportation and Economic Development. Alternate title: Rail Transit and Economic Growth: Documenting Evidence from a Panel Data Analysis of Eighteen Metropolitan Areas in the United States.
• Corporate Authors:

  Transportation Research Board

  500 Fifth Street, NW
  Washington, DC  United States  20001
• Authors:
  • Li, Wei
  • Rosenheim, Nathanael P
  • Dong, Hongwei
  • Boarnet, Marlon
  • 0000-0002-0890-347X
  • Zhong, Haotian
• Conference:
  • Transportation Research Board 96th Annual Meeting
  • Location: Washington DC, United States
  • Date: 2017-1-8 to 2017-1-12
• Date: 2017

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; References;
• Pagination: 26p
• Monograph Title: TRB 96th Annual Meeting Compendium of Papers

Subject/Index Terms

• TRT Terms: Data analysis; Economic growth; Employment; Jobs; Metropolitan areas; Rail transit; Transit oriented development
• Geographic Terms: United States
• Subject Areas: Economics; Planning and Forecasting; Public Transportation;

Filing Info

• Accession Number: 01623353
• Record Type: Publication
• Report/Paper Numbers: 17-04978
• Files: TRIS, TRB, ATRI
• Created Date: Jan 24 2017 3:31PM