Research 350 - NZ Transport Agency

ECONOMIC DEVELOPMENT BENEFITS OF TRANSPORT INVESTMENT
Steer Davies Gleave’s (SDG) Guidance on Preparing an Economic Impact Report (2003)
provided advice to the UK Department for Transport on the development of such an
assessment.
SDG suggests measuring impacts of transport developments through use of a single indicator
(changes in employment) within defined ‘regeneration areas’ (i.e. areas of deprivation,
identified urban renewal areas and identified rural areas requiring improved
productivity/accessibility). It is suggested that the assessment of impacts be limited to the
region in question and surrounding regions (it is not necessary to demonstrate whether any
new jobs generated by a transport scheme would have gone elsewhere in the country).
However, the SDG report does not specifically indicate how changes in employment are to be
assessed.
The SDG work again reveals a focus on the impact of disadvantaged regions. However, while
these are often of interest, policymakers are often interested in how transport investment
impacts on a variety of areas.
Further, the SDG approach’s focus on unemployment is problematic. Regional employment
results may be difficult to reliably estimate for the reasons discussed above. A focus on
employment may also ignore other indicators such as changing incomes. For example, if a
transport investment generates a large number of low paying jobs, should it be judged
superior to one which generates fewer jobs but increases regional incomes by a greater
amount?
Another issue relates to SDG’s argument that only impacts on the defined region and
surrounding regions. It seems perverse to restrict the analysis to such a limited scope,
particularly as there may be negative impacts on more distant areas, and without considering
the national impacts of transport investment.
For these reasons, the SDG approach is not seen as a particularly useful advance on other
approaches.
4.4 Assessment of other distributional effects –
appraisal of approaches
The above discussion indicates there is no clear answer to the question of whether or not
improving transport links within a given region will result in higher regional output, jobs or
wealth. Much depends on complementary regional infrastructure and how the ‘two way road’
problem applies within a specific context.
Likewise, it is difficult to fully ascribe impacts on particular socio-economic groups (e.g.
pensioners, disabled, unemployed) either within a given region or nationally, though there
may be clear correlations between regions and certain sub-groups, e.g. the unemployed.
Indeed, it is precisely the presence of such correlations which lies behind much of the intent
to use transport investment to promote regional development.
For example, as noted above, much stress is often laid on the need for transport projects to
‘create jobs’ at both the national and regional levels in order to alleviate unemployment. In
many cases, this finds a particularly regional focus, with the emphasis on providing transport
links to economically depressed regions with high unemployment. However, as suggested
above, there is no guarantee that regional transport investment will necessarily assist
regional employment in the short or long term.
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