Research 350 - NZ Transport Agency

4. APPROACHES TO ASSESSING REGIONAL ECONOMIC AND OTHER DISTRIBUTIONAL EFFECTS
whether to commute or migrate between nearby regions. The impact of transport
improvements may therefore largely depend on the relative states of the housing and labour
markets in the affected regions. (SACTRA 1999, paras. 5.64-5.66).
In essence, theory provides no definitive answer to the issue of whether a specified region
will ‘benefit’ (through higher wages and employment) from the impact of transport
investment. It is for these reasons that SACTRA has expressed an interest in LUTI modelling
of the links between the product, property and labour markets, though the problems
associated with this have already been noted above.
Within a New Zealand context analysts such as O’Fallon (2004) see the two way road problem
as creating a ‘significant risk’ that the benefits of improving transport infrastructure in a
smaller, less developed region will not accrue to that region (unless it has a unique asset)
but, instead, flow to larger, more diverse ones. This may be particularly true of areas close to
major cities, such as Auckland (O’Fallon 2004, p. 16).
However, a further complication is the differing urban/regional context of the UK/Europe as
compared to New Zealand. While labour market commuting/migration decisions may be an
issue in the densely populated UK/Europe, (and in some New Zealand conurbations) this may
be less of a factor in determining regional impacts of transport improvements in more
isolated New Zealand locations with smaller populations. Thus geographical factors may
obviously limit the labour market impacts of transport improvements in some rural New
Zealand contexts.
Many studies would appear to miss issues connected with the two way road problem As
SACTRA notes direct transport effects are often assessed only for a defined area in the
neighbourhood of the improvement (SACTRA 1999, Summary Report, para. 40.) However, as
hinted above, the two way road problem does not necessarily result in ‘negative’ outcomes
for targeted regional populations, though migration issues do create questions about whom
the ‘regional’ population is ultimately composed of (i.e. the issue of the ‘population of
standing’).
For example, assume that a new transport link is constructed between two contiguous
regions: Region A, an underprivileged region of high unemployment and Region B a better-off
area of low unemployment. A study which only reviewed changes in job vacancies or some
other measure of employment opportunities (as opposed to unemployed residents,
regardless of where they were now employed) within Region A would not pick up the fact that
many previously unemployed residents may now be able to commute to new work
opportunities in Region B. It is noted for example that some of the individual measures used
in Mees’ (2001) study of the impacts of the Western Ring Road, such as changes in local
(Western Melbourne) jobs and the ratio of local jobs to local residents might miss some of
these employment flow impacts – though Mees’ other data may be sufficient to make up for
this.
Similarly, it is quite possible that no new investment opportunities may be created within
Region A – rather those in Region B may be further enhanced by ready access to cheaper
labour from Region A. Thus a study examining the development of new industries in Region
A may find little evidence of any such growth (at least in the short term). However, in both
cases residents of Region A could be said to have benefited from the new link. (Whether this
would result in increase in GRP is, however, a more complex issue.)
85