WEI: Information needs for further analyses
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1 WEI: Informaton needs for further analyses Annegrete Bruvoll Senor researcher Vsta Analyss AS Vsta Analyss - analyses on transport and communcaton sectors: Cost beneft analyses Publc procurement of transport servces and publc procurement processes Market analyss and traffc modelng Models for analyss of nfrastructure projects mpacts on transport markets and socetal cost and benefts Qualty assurance of nvestments n transport nfrastructure Other thematc felds: Busness analyss and development Strategy development and desgn of polcy nstruments Publc admnstraton, organzaton and management Qualty assurance of nvestments n transport nfrastructure and WEI estmates n Vsta Projects: - KS2 Ralway Porsgrunn-Larvk - KVU Intercty Østlandet Oslo Lllehammer/Halden/Sken - KS E39 Søgne - Ålgård - Test study for Statens Vegvesen E39 Aksdal Bergen Uncertan results, to be used wth cauton 2
2 Modellng of WEI n Vsta Standard methodology, followng Graham et al (200), Department of UK Transport (2009): Productvty effects: X How to fnd the approprate parameters? m X m j m T El X T T a( c ) z j j agglomeraton ndex a(c j ): weghts z j : aggregaton varable El : elastcty X : producton 3 The calculaton of the agglomeraton ndex Locaton a( c ) j a ) ( c 2 Locaton a( c n ) z Locaton j2 z 2 T j a( c ) z j j j α j z j d j : dstance / generalzed costs α : dstance decay parameter z j : aggregaton varable d z j Locaton jn 4 2
3 : Computng T d j generalzed travel costs between locatons Data source: Vsta Analyss transport model costs nclude travel tme costs, watng tme costs, tcket costs, road toll costs etc our E39 case: tme costs, drvng costs, ferry costs z j aggregaton varable: employment at the locaton employment + net commutng to the locaton Data source: Statstcs Norway muncpalty data 5 2: The economc effects X : gross product - Producton n the economc zones close to the ralway statons? Producton close to E39? - E39: All of western Norway? - Restrcted to producton related to commutng workers? - The entre economy s n practse nfluenced calls for equlbrum modellng/both postve and negatve effects - A larger area mples a hgher X, but also a lower change n densty Lmts subject to analyst s judgement Consstency: defne the X s and the d j s for the same geographc areas and make a reasonable choce of the sze of the area affected 6 - Our choce: - County statstcs for gross producton, average per employed - Multpled wth employment n the affected area 3
4 3: Choose the elastcty the brdge between densty changes and productvty El : elastctes; lack of case specfc estmates Ideally: case specfc estmates for each locaton, usng the same producton data as used n the calculaton above: X T El / X T Estmated elastctes wll vary wth Geography Dstance / sze of X ) Sector/ndustry Excellent estmates from UK and other nternatonal sources But not necessarly relevant to Norwegan sectors / localtes / economc condtons 7 What to choose? Our base source: Graham et al (200); elastctes 0,024-0,083 Rosenthal and Strange (2004): most estmates n the range 0,04-0, Compared to Norway: - dfferent geography compared to UK ctes, n partcular for E39 projects rural, densely populated, decentralzed, coastal areas wth dfferent transport structure - elastctes may also vary over tme communcaton technologes nfluence the margnal beneft from mproved physcal communcaton - Our choce: - per sector elastctes from Graham et al n - to make more case relevant: weghed wth actual sector employment El L k El L k k 8 4
5 The results from our E39 example Elastcty Change n densty, percent Related producton, mll. NOK WEI, mll. NOK Stavanger Stavanger 0, Karmøy Karmøy 0, Haugesund Haugesund 0, Tysvær/Aksdal 0, Sveo Sveo 0, Bømlo 0, Stord 0, Ftjar Ftjar 0, equal to 4-5 % of conventonal benefts (usually -30 %, manly 5-0 %) Os Os 0, Bergen 0,037 0, Sum Compared to Heum et al: mcroscopc effects Manly due to choce of methodology 9 Also a clear ndcaton of the need for further research Other calculatons: - Intercty Østlandet Oslo Lllehammer/Halden/Sken Densty ncrease: 2% (Drammen) - 29% (Lllehammer) - E39 Søgne Ålgård Densty ncrease: about 0% - Ralway Porsgrunn-Larvk: Densty ncrease: 0, % Stll sgnfcant productvty effects 0 Due to lack of proper data: - not ncluded n the conventonal C/B - senstvty analyses only 5
6 How to mprove the estmates Improve the man weakness: the connecton between changes n densty and productvty;.e. the ELASTICITIES Ideally use the same sources for producton data (geographc lmts) n the estmaton of elastctes as n the calculaton of productvty effects SECURE CONSISTENCY Productvty measure: Changes ncome/wages E.g. muncpalty and town dstrct (bydel) ncome statstcs from Statstcs Norway Densty: general travel costs between pars of muncpaltes/town dstrcts Panel data to ncrease data ponts and ensure suffcent sgnfcance level C.f. COWI estmates on Norwegan countes, varyng between 0,0007-0,044 How to mprove the estmates (cont.) Control for other relevant factors, e.g.: The Norwegan muncpaltes ncome system may curb the effect of reduced densty, as the system ams to reduce ncome dfferences between muncpaltes Sector structure domnated by (temporary) poltcal decsons nfluences average ncome level Elastctes may change over tme, e.g. due to new communcaton technologes Supply wth analyses over tme, panel data analyses If sgnfcant estmates on regonal data: lnk to relevant average ncome levels -> good control on the estmates relevance and qualty Sector estmates can be used n other areas wth dfferent producton structure, by weghed estmates 2 6
7 Man ponts Despte caveats: - Postve externaltes mportant to capture and take nto account n polcy analyss - Analogous to the more commonly known negatve external envronmental effects - Despte lack of accepted methodology n Norway; obvous postve extra effects expressed by the publc opnon and by poltcans - Lack of Norwegan estmates - Relatvely large varaton n nternatonal estmates and those made on Norwegan condtons (e.g Graham et al vs Heum et al) - To get closer to valung the external effects: Case and geography specfc estmates for Norwegan condtons 3 GOAL: Include productvty effects n lne wth external envronmental effects 7
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