Methodology for Determining the Economic Development Impacts of Transit Projects (2012) / Chapter Skim
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8 2. SYNTHESIS: THE STATE OF THE ART AND THE STATE OF THE PRACTICE In this section of the report we describe existing academic theory and research methods to estimate the economic impacts of transit investments, focusing on agglomeration impacts.
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9 Transit-supportive plans and policies are defined by FTA as those that support pedestrian mobility and accessibility, and include pedestrian network connectivity, building setbacks, parking design, requirements, and regulations, the land use mix, and residential and commercial densities. These are documented through an inventory of relevant plans, policies, and ordinances, as well as a narrative description of potential barriers such as environmental contamination.
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10 rapid dissemination of specialized production knowledge. The relative importance of each of these agglomeration mechanisms is not well understood empirically, though there is a welldeveloped set of theories.
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11 TABLE 1 Transit projects and hypothesized agglomeration mechanisms Agglomeration mechanism Likely facilitated by transit projects? Input sharing (enabling horizontal vertical disaggregation, that is, small, nimble firms instead of large ones; and supplier specialization)
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12 TABLE 2 Possible variation in additional economic benefits Cost Time savings "Other" economic benefits Notes Example 1 $1.5bn $0.80bn $0.10bn Low demand for project Example 2 $0.50bn $0.75bn $0.50bn Relieve transportation bottleneck Example 3 $0.50bn $0.10bn $0.20bn Post-project travel/congestion Example 4 $2.50bn $0.90bn $1.80bn Ability to attract agglomeration of firms There may also be other additional economic benefits of transit investments that are related to but distinct from agglomeration effects, including: • Transit network effects • Economic multiplier effects • Reduced income-tax-related deadweight loss • Greater price competition The first of these is the increasing returns to scale in waiting, walking, and transfer times that come with higher-density transit networks. Some transit investments may reduce waiting, walking, and transfer times, but these depend on specific details of the transit network and also of the corresponding pedestrian network.
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13 roads that are used by freight, leading to the possibility of effectively larger market areas for some industries. Interviews We conducted eighteen practitioner interviews with transit agencies, metropolitan planning organizations (MPOs)
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14 benefit analysis, proprietary models such as REMI and TREDIS, input-output models, and real estate investment studies (these are discussed in the next section)
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15 TABLE 3 Summary of methods used by sample studies Study Cost–benefit Analysis Input-Output/CGE Real Estate Ad Hoc Chicago Metropolis X TREDIS Access to the Region's Core (ARC) X REMI X Metrolinx X Proprietary X MAROps X REMI X New York Cross Harbor X REMI Chicago Region Freight (CREATE)
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16 defined in the academic literature; see Appendix C)
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