Valuing Domestic Transport Infrastructure: A View from the Route Choice of Exporters

Speaker: Fan Jingting, Pennsylvania State University

Discussant: Costas Arkolakis, Yale University

Time: June 25, 2020    09:00 AM    (GMT+8:00)

Abstract:

A key input to quantitative evaluations of transport infrastructure projects is their impact on transport costs. This paper proposes a new method of estimating this impact relying on the widely accessible customs data: by using the route choice of exporters. We combine our method with a spatial equilibrium model to study the aggregate effects of the massive express-way construction in China between 1999 and 2010. We find that the construction brings 5.6% welfare gains, implying a net return to investment of 180%. Our analysis also produces some intermediate output of independent interest, for example, a time-varying IV for city-sector export.