Use of Singly-constrained Employment Effects for Wider Economic Benefit Estimation



Use of Singly-constrained Employment Effects for Wider Economic Benefit Estimation

Authors

N Raha, MVA Consultancy, UK

Description

We report on the use of singly-constrained distribution models to estimate employment effects for use in wider economic benefit calculations in a London case study. We discuss the robustness and transferability of this cost-effective approach.

Abstract

The economic appraisal of transport schemes continues to evolve; the latest development being the consideration of wider economic benefits (WEBs). To analyse the WEBs of transport (including its impact on agglomeration and labour productivity) it is necessary to estimate the impact of transport on employment location.

It is standard practice when modelling commuting destination choice to (doubly-)constrain the number of commuting trips travelling to a given area to meet (a suitably scaled fraction of) local employment totals. It has been recognised in some studies that by relaxing this constraint it might be possible to assess the impact that an intervention would have on employment location choice.

In 2006 Transport for London (TfL) commissioned MVA Consultancy, in collaboration with David Simmonds Consultancy (DSC), to create a methodology utilising London Transportation Studies (LTS) model outputs to calculate WEBs as part of TfL?s policy development process. The proposed methodology for doing this was also independently reviewed and approved by the UK Department for Transport (DfT). The approach applied the LTS endogenous (singly-constrained) employment response to estimate changes in employment location in response to changes in transport costs and accessibility.

Existing DfT guidance on the procedures for the calculation of WEBs recommends the use of specialist Land Use Transport Interaction (LUTI) or economic models to estimate employment impacts. It does not include the option of using a singly-constrained commuting trip-end distribution model to provide an estimate of the employment effects (in terms of change of location of jobs) likely to occur as a result of transport cost changes. Because the adaptation of existing transport models in this fashion may provide a practical and manageable route to assessing WEBs employment impacts, DfT wished to consider the robustness and suitability of this approach as an additional modelling option. In late 2007, DfT commissioned MVA and DSC to document the methodology applied to WEB calculation using LTS, with particular emphasis on the application of the singly-constrained commuting distribution model to the estimation of employment impacts.

This paper reports the findings of that study and begins with a step-by-step methodological outline of the approach, including general background on the LTS model and the key assumptions made in the analysis and modelling. We proceed to discuss the outputs taken from the transport model and their application in the WEB estimation. That leads us to comment on the robustness of the approach and the transferability of the procedure to other model platforms and geographical locations.

The application of singly-constrained transport models (SCTM) to estimation of employment impacts in LTS proved to be both effective and efficient. Direct transfer of the method to other models is possible, though the practicalities would depend strongly on the structure of that model. That said, cut-down approaches can be devised to permit the rapid application of SCTM techniques to many model types (even those with fixed matrices), albeit at the expense of internal consistency. We also find that methods exist to improve the quality of the results in conjunction with tests carried out using a full LUTI model.

From the point of view of comparison with a full Land Use Transport Interaction (LUTI) approach, while SCTM journey?to-work trip-end changes may be taken as indicators of employment change, they may not be responding to the most appropriate transport cost changes. For example, retail employment may be a function of goods delivery costs. Also, SCTMs do not take account explicitly of any of the feedback or linkage which may arise.

The study recommended that, in order to compare the relative merits of SCTM with a LUTI method for estimating employment impacts, both methods should be used on one or more test cases. This would be a potentially useful follow-on phase to the project and would allow the identification of differences (major or minor) and permit judgment as to circumstances in which the SCTM approach would be suitable.

Publisher

Association for European Transport