Heterogeneous Economic Impacts of Transportation Features on Prefecture-Level Chinese Cities

Abstract

The present paper examines the heterogeneous economic impacts of transportation characteristics, with a consideration of spatial heterogeneity, across Chinese prefecture-level cities. Using data from 237 Chinese cities from 2000 to 2012, a random-parameters model is applied to account for the heterogeneity across these cities. The estimation results reveal significant variability across cities, with the computed impacts (elasticity values) of transportation-related features (highway and railway freight volumes, highway passenger volume, urbanization rate, public transit, paved roads, and highway congestion rate) varying significantly across cities. The impacts are mostly positive, except for highway congestion rate. A 1% increase in a city’s highway and railway freight volumes would increase the city’s gross product per capita from 0.0001% to 0.0972% and 0.0001% to 0.0254% across cities in China, respectively. While a 1% increase in highway congestion rate would decrease the city’s gross product per capita by an average of 0.031%.