The Economic Benefits of Transit Service
In his current research on the impacts of transport improvements on agglomeration economies, Assistant Professor of City & Regional Planning, Dan Chatman, pointed out that the scarcity of both readily available data and good theories about transit and economic growth make it hard to determine whether it is worth investing in public transit.
Building on a body of previous research that showed the connection between employment density and higher wages, Chatman and his colleagues traced the links between transit, agglomeration, and productivity based on data from metropolitan areas in the U.S.
The study supported advocates for the benefits of transportation improvements by finding significant indirect productivity effects. For example, estimated annual wage increased across metropolitan areas for an increase in seats or rail service miles per capita. Although there are high costs to providing or improving transit service, the study suggests that densification and growth due to transit improvements provide unanticipated benefits.
However, there was also a separate study suggesting a less positive impact of transportation as property values of houses farther than one-quarter mile away from a new transit line decreased.
For urban planners and cities debating the economic value of public transportation investments, these results suggest that large cities with significant road congestion should expect large economic benefits from public transit expansions that enable central city densification.
At the same time, while improvements to transit service in other locations may benefit lower-income households and other groups with higher reliance on transit, they may not confer the same levels of generalized economic benefit.
Nevertheless, as cities and metropolitan areas become more congested, it is critical that we continue to strive to understand the complex relationships between transit, urban growth, and productivity so that we make wise decisions with the greatest overall benefit.
Read the Spring 2014 issue of FRAMEWORKS here.