May 21, 2010

Do Transit Investments Increase Agglomeration Economies?


Dr. Daniel G. Chatman, Assistant Professor of City & Regional Planning, UC Berkeley


Some public transport projects may increase economic productivity by facilitating the growth of urban agglomerations of firms. Understanding the potential for such impacts could be useful in allocating funding to maximize the benefit of such investments. To explore whether and how these impacts should be estimated, we reviewed academic and practitioner literature and interviewed staff and consultants familiar with public transport funding applications. Relevant academic studies are piecemeal and diverse. They use different dependent variables (e.g., changes in productivity, firm revenues, wages, and land values) and different independent variables (e.g., accessibility changes and changes in density). The spatial unit of analysis ranges from the metropolitan region to small areas. But there has been almost no direct study of public transport investments and how they relate to agglomeration economies. Interview respondents cited a variety of methods in estimating economic benefits, but these generally do not account for external agglomeration benefits. We identify ways to conduct research building on this literature that is relevant for this particular question and that is relevant to practitioners. We also present initial evidence from a longitudinal study of rail starts using a hundred metropolitan areas over a ten-year period.

Biographical Sketch

Dan Chatman is an assistant professor of city and regional planning whose research areas of interest include travel behavior and the built environment; residential and workplace location choice; “smart growth” and municipal fiscal decision making; and the connections between public transit, immigration and the economic growth of cities. His research relies heavily on original data collection including surveys, focus groups and interviews. Current projects include studies of the economic impacts of south Jersey’s River Line; the barriers to transit-oriented development in New Jersey; the implications of immigration trends for transit service in the state; and a nationwide study of whether transit investments increase agglomeration economies. He is working on a book entitled The Death and Life of Smart Growth, with Randall Crane. Before joining UC Berkeley’s Department of City and Regional Planning, Professor Chatman was an assistant professor of urban planning and policy at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University and research director of the Alan M. Voorhees Transportation Center at Rutgers University. His previous experience includes work as a planner and consultant in the Bay Area, and three years with the Peace Corps in Botswana.