An Evaluation Method for Direct and Indirect Benefits of Transportation Improvements

Abstract

This paper aims at identifying indirect benefits caused by a public project which decreases the transportation costs of goods. Inter-regional effects is introduced by considering a migration which is induced by a unequal transportation effect between regions. This i s modeled as a household's utility maxization problem with the choice of goods consumption and residential place.
As a conclusion, three types of benefits of transportation improvement are formulated, direct benefits by decreased transportation costs conventionally used in the practical evaluation, indirect benefits by the change of prices of ordinary goods, and also indirect benefits by the migration newly identified in this paper.