Returns to Publicly Owned Transport Infrastructure Investment. A Cost Function/Cost Share Approach for Norway, 1971-1991

Arbeitspapier

An issue of major concern to politicians and policy-makers around the world today is whether transport infrastructure investments, such as those in roads and airports, generate enough economic benefits to justify their very large price tag. Beginning in the mid 1970s, nearly all OECD countries experienced a sustained decline both in public investment and in private sector output. Since infrastructure comprises the vast majority of public capital in these countries, this led many economists to conclude that underinvestment in infrastructure was largely responsible for the low growth rates in output and productivity which were experienced by these countries. In our paper, we discuss the findings in the literature with respect to both econometric and modeling deficiencies. Based on these criticisms, we develop a cost function modeling approach which includes public transport infrastructure capital, perform an econometric analysis and discuss several of our estimates of infrastructure productivity effects. The paper concludes that, in nearly all production sectors (except oil/agriculture), the public transport infrastructure investments made in Norway over the last 20 years significantly reduced private production costs and altered demand for private inputs. However, we find such effects to be statistically insignificant at the aggregate level.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Papers ; No. 154

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Fiscal Policy ; National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock ; Transportation Economics: Government and Private Investment Analysis; Road Maintenance, Transportation Planning
• Subject: Infrastructure ; public transport investment ; economic growth.

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bye, Torstein ; Katz, Alexandra
• Event: Veröffentlichung
• (who): Statistics Norway, Research Department
• (where): Oslo
• (when): 1995

Further information

• Handle: http://hdl.handle.net/10419/192138