Is Infrastructure Productive? Evaluating the Effects of Specific Infrastructure Projects on Firm Productivity within New Zealand

Motu Working Paper No. 05-14

49 Pages Posted: 25 Jun 2006

See all articles by Jason Craig Timmins

Jason Craig Timmins

Motu Economic and Public Policy Research Trust - Department of Labour

Date Written: November 2005

Abstract

The paper investigates the feasibility of using a variant of the spatial equilibrium model to estimate the productivity effects of a specific infrastructure project in New Zealand. Policy makers are interested in the marginal effects of infrastructure investment on productivity and an evaluation of such effects would provide a useful check on the appropriateness and adequacy of current decision rules and institutions. To date, there appear to be no examples of using a spatial equilibrium model to estimate the productivity effects of a specific infrastructure project. However, the analysis in this paper suggests that such an approach is feasible. There is a range of data and estimation issues that needs to be addressed in the use of a spatial equilibrium model for this purpose, but we find that a reasonably useful range of data is available in New Zealand. The next step in determining feasibility is to select a particular infrastructure project, and to develop an empirical model based on available data.

Keywords: Infrastructure, regional economics, land and labour markets

JEL Classification: H54, R11, R23, R31

Suggested Citation

Timmins, Jason Craig, Is Infrastructure Productive? Evaluating the Effects of Specific Infrastructure Projects on Firm Productivity within New Zealand (November 2005). Motu Working Paper No. 05-14, Available at SSRN: https://ssrn.com/abstract=911327 or http://dx.doi.org/10.2139/ssrn.911327

Jason Craig Timmins (Contact Author)

Motu Economic and Public Policy Research Trust - Department of Labour ( email )

PO Box 3705
Wellington
New Zealand
64-4-9154397 (Phone)

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