ON THE RELATION BETWEEN USERS' BENEFITS AND THE ECONOMIC EFFECTS OF TRANSPORTATION ACTIVITIES

ABSTRACT. The addition of output variation benefits to the users' surplus generated by transportation improvements has been subject to debate, and no agreement has been reached. In this paper, the problem is restated at the level of the origins of transportation demand, which can be derived from the information provided by the economic activity. It is shown that a competitive productive environment makes the transportation consumers' surplus exactly equal to the net economic benefits provoked in the products' markets; however, when monopolistic production prevails, the users' surplus may not reflect the benefits to the economy with accuracy. Mixed conditions are also explored and the role of final products' demand elasticity is highlighted. Different styles of welfare analysis are recommended for different market conditions.     

ECONOMETRIC MODELING OF INTERREGIONAL LABOR MARKET LINKAGES*

ABSTRACT. This paper presents a statistical procedure for empirically establishing linkages between regional economies. Using Granger's definition of causality and the final prediction error technique for lag-length specification suggested by Hsiao, a linked, multiregional employment model is developed. The forecast performance of the linked model is compared to models which do not include interregional linkages. It is shown that forecast error is reduced by taking into account employment interrelationships between regions.