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Is Infrastructure Productive? Evaluating the Effects of Specific Infrastructure Projects on Firm Productivity Within New Zealand
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.
Citation
Timmins, Jason. 2005. "Is Infrastructure Productive? Evaluating the Effects of Specific Infrastructure Projects on Firm Productivity Within New Zealand," Motu Working Paper 05-14.
Motu code: MWP0514
JEL codes: H54, R11, R23, R31