Quantifying Wider Economic Impacts of agglomeration for transport appraisal: Existing evidence and future directions

Abstract

This paper is concerned with the Wider Economic Impacts (WEIs) of transport improvements that arise via scale economies of agglomeration. It reviews the background theory and empirical evidence on agglomeration, explains the link between transport and agglomeration, and describes a three step procedure to appraise agglomeration impacts in a number of different settings. It includes new analytical work on measures of agglomeration and reports agglomeration-productivity elasticity estimates for the UK not previously published in the academic literature. The paper concludes with a set of recommendations for future empirical work on agglomeration and transport appraisal.