The Impacts of Transportation Investments on Economic Growth in the Twin Cities

Principal Investigator:

Jason Cao, Assistant Professor , Humphrey School of Public Affairs

Co-Investigators:

  • Michael Iacono, Research Fellow, Civil, Environmental and Geo-Engineering
  • David Levinson, Professor, Civil, Environmental and Geo-Engineering
  • Andrew Owen, Director, Accessibility Observatory, Civil, Environmental and Geo-Engineering

Project Summary:

The transportation system plays a critical role in fostering economic growth. Although previous studies have shed light on the impacts of transportation investments, their results are not readily adapted to predicting economic impacts of individual transportation projects. This study aims to (1) investigate the impacts of transportation investments on economic growth (wages and employment) in the Twin Cities and (2) develop a method that practitioners can apply to predict economic growth resulting from investments in individual projects (as well as disinvestments). The capacity of such predictions is critical for the economy of the Twin Cities because transportation infrastructure lasts for decades once built. The method is expected to be used by practitioners of planning, programming, and finance at MnDOT and DEED, as well as at the Metropolitan Council. Specific research questions are: - Which measures of agglomeration/accessibility (urbanization economy, localization economy, or labor pooling) are the most important for different types of industries? - What is the relative importance of automobile accessibility and transit accessibility? - Which links in the existing transportation network are critical for the economy in the Twin Cities? - How can the empirical framework be extended to the whole of Minnesota? What are the challenges regarding the approach and data sources?

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