The development of transport infrastructure is a central issue for States, which spend billions to connect cities. But what is their real effect on the municipalities concerned? Researchers from USI and Université de Genève looked at the evolution of the income composition of the population of cities in Switzerland once they are connected to the motorway network. By analysing data from 1950 to 2010, they found that this new accessibility leads to substantial benefits for wealthy people, but indirect costs fall disproportionately on people with low incomes. The results can be read in The Economic Journal.
The analysis performed by Prof. Raphël Parchet at USI and his colleagues Frédéric Robert-Nicoud at the University of Geneva and Stephan Fretz (Swissgrid) covers the period 1960-2010, a time span in which the overall Swiss population grew from about 5.3 million to 7.8 million (and 8.7 million today). In more detail, the study shows some interesting elements about this demographic growth, such as the substantial spatial heterogeneity, the fact that the population of rural municipalities that got access to the highway network grew by 17% relative to the country average, and that the overall relative urban flight reveals a relocation of households from urban centres (relative growth of -41%) to suburban municipalities (relative growth of +42%).
On the other hand, the study documents ceratain mechanisms related to income distribution. In particular, the presence of a highway entrance/exit ramp within 10km of a municipality caused a long-term 24% increase in the share of top-income taxpayers living in the area and an 8% decrease in the share of below-median income earners. Parchet and his colleagues note that highway accesses lead to worker sorting along skills and incomes, which is likely to have implications for voting and, in federal countries such as Switzerland that grant large budget autonomy to their municipalities, on tax competition.
As Prof. Parchet explains, "Car use is a luxury; housing is a necessity. Thus, the benefits of highway access disproportionately accrue to the well off, and its costs disproportionately hurt low-income earners. Municipalities that get access to highway network have become attractive to everyone, but it is the affluent who have benefited the most".
The complete report Highways, Market Access, and Spatial Sorting, is published in The Economic Journal (Oxford University Press) and is available online at >> https://academic.oup.com/ej/advance-article/doi/10.1093/ej/ueab070/6369349
For further reading, see the attached press release by Université de Genève.