Data

The research assembles geographically detailed data on locations, (postcodes) that have been affected by major transport innovations such as the Jubilee Line Extension, M6 Toll, Newcastle Metro extensions, and other major road and rail infrastructure capacity investments.

Spatial economic data describing the characteristics of workers and firms is taken from the New Earnings Survey/ASHE micro data, which contains home and firm postcodes, and the Annual Respondents Database, which contains detailed time series information on firms across a range of industries.

The panel nature of the data allows us to follow individuals and/or firms over time in relation to geographical locations of workplaces and residences. We are able to uncover transport impacts by observing what happens when:

• transport infrastructure changes (innovations) take place

• workers move to homes with better transport access

• workers move to jobs in more accessible places

• firms move from one place to another with better transport access

The panel dimension of the micro data is ideal for the issues we are investigating. It allows us to control for unobserved individual and/or firm effects and time trends, allowing us to address issues of endogeneity which are frequently encountered in spatial economic analyses, particularly those concerned with assessing the impact of transport provision.

Methods

The main objective of the empirical work is to assess the impact of changes in transport provision on changes in labour markets, agglomeration and firm productivity.

The methods used exploit these multiple innovations in an appropriate empirical setting in order to provide estimates of the ‘causal’ impact of transport changes. These methods integrate the difference-in-difference techniques used in the analysis of house prices in Gibbons and Machin (2006) with the cross-sectional approach to agglomeration exemplified in Graham (2007) and Rice and Venables (2006).

The research offers a new application of existing techniques that have proven successful in other contexts. It considers the possibility of constructing measures of how these innovations have transformed accessibility by mode and the generalised cost of travel.

While the empirical work draws on specific transport innovations, it is not a case-study based approach. Instead, the research applies econometric techniques that exploit the combined changes in travel costs and accessibility induced by all these innovations together, in order to inform our understanding about the general impacts of transport and agglomeration on the labour market and on firm productivity.

The ultimate aim is to use sound micro-empirical foundations to form the basis for a better understanding of how transport, labour markets and agglomeration are linked at the macro level.

Regarding firm productivity, the research considers the role of transport on clustering and how transport innovations change the local relationship between the number of firms and the productivity of a panel of firms observed in the ARD.

Planned Outputs

The research will provide empirical evidence on the role of transport provision in: the operation of labour markets; the generation and distribution of agglomeration economies; and on levels of firm productivity.

This will include:

• A set of estimates from our econometric work that describe links between transport, labour markets and agglomeration.

• Newly collated consistent data on transport innovations, which we hope could be made be publicly available for future analysis. It may be possible to allow others to add to the data set on the basis of a pre-specified methodology.

The research will be written up in a series of papers on the impact of transport on labour markets, agglomeration and firm productivity. The findings will also be disseminated through presentation at relevant international conferences, seminars and workshops.