EFFECTS OF TRANSPORTATION IMPROVEMENT ON THE STORE LOCATION AND THE COST-BENEFIT ANALYSIS

Abstract

The benefit of a transportation improvement is practically measured only by the total surplus in transportation market. However, this measurement model is incorrect if the economy has distortions. The current paper uses spatial competitive equilibrium models to discuss how to measure the benefit of a transporation improvement. Since the benefit formula has the variables which cannot be measured from the transportation market, we discuss the method of measuring them. We develop three models as specific patterns of spatial competitive market. From these models, we show how location of stores and prices at stores are affected by a transportation improvement.