The Welfare Effects of Transportation Infrastructure Improvements

The authors develop a general equilibrium geographic framework to characterize the welfare effect of transportation infrastructure investments. The authors tackle three distinct but conflating challenges: First, the authors offer an analytical characterization of the routing problem and, in particular, how infrastructure investment between any two connected locations decreases the total trade costs between all pairs of locations. Second, the authors characterize how this cost reduction affects welfare within a standard general equilibrium geography setup where market inefficiencies arise due to agglomeration and dispersion spillovers. Finally, the authors show how their framework admits analytical characterizations of traffic congestion, which creates a critical – albeit tractable – feedback loop between trade costs and the general equilibrium economic system. The authors apply these results to calculate the welfare effects of improving each of the thousands of segments of the U.S. national highway network. The authors find large but heterogeneous welfare effects, with the largest gains concentrated in metropolitan areas and along important trading corridors.


  • English

Media Info

  • Media Type: Digital/other
  • Features: Appendices; Figures; Maps; References; Tables;
  • Pagination: 48p
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 01713859
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Aug 7 2019 3:42PM