Evaluation and Impact of Agglomeration Economies: Application to Leeds City Region



Evaluation and Impact of Agglomeration Economies: Application to Leeds City Region

Authors

J Swanson, L Rognlien, A Davies, D Czauderna, C Triadou, Steer Davies Gleave, UK

Description

This work adopted a specific view on understanding the relationship between transport investment and agglomeration economies and on impacts of different measurements of economic benefits. Policy recommendations for appraisal were derived.

Abstract

This work, commissioned by Metro and the Centre for Cities (IPPR), adopted a specific view on estimating the interaction between transport and land-use planning and on impacts of different measurements of economic benefits.

More specifically, the research seeked to better understand the relationship between transport investment and agglomeration economies ? and how new methodologies to estimate these benefits can be applied at a city-region level. The aim was to assess the potential agglomeration impacts of three different strategic approaches to improving transport links in the Leeds City Region and to derive policy recommendations for appraisal.

The structure of the presentation will be as follows. First we introduce the overall methodology to estimate the agglomerations benefits. We specify next how this methodology has been applied to the Leeds City Region. Finally we present some results on the magnitude of the agglomeration benefits and compare these impacts to traditional impact indicators.

The process combined our Urban Dynamic Model to estimate interactions of transport policies and land-use development in urban context, and additional computations to estimate both conventional user benefits and agglomeration benefits. Agglomeration economies are one type of transport impacts termed Wider Economic Benefits which are now part of guidance from the Department for Transport. They are wider in the sense that they represent impacts that go beyond the conventionally measured economic welfare impacts of transport.

Our work provided estimates of the wider economic benefits for three transport investment packages and assessed their magnitudes compared to conventionally measured benefits. Our findings contained several key messages to decision makers;
? We now have a working methodology for assessing wider economic benefits of transport interventions
? Including these benefits can significantly affect the estimates of their social returns
? The impacts are non-trivial; they vary substantially according to scheme specifics

In sum we draw the conclusion that wider economic benefits must be taken account of in transport appraisal, both to get the prioritisation right between schemes and to ensure the full returns of transport investment are reflected.

Publisher

Association for European Transport