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Determining the economic development impacts of transit improvements

Rutgers, The State University of New Jersey and the Transportation Research Board

When cities consider making major transit investments, how can they be sure what impact it will have on the wider economy? Steer Davies Gleave has risen to the challenge of developing a methodology that is both robust and comprehensive, while being useful and cost-effective.

Transit investments can stimulate economic development and improve access between origins and destinations, but dynamic benefits may also occur, including increases in the size of industry clusters and labor pools, or “agglomerations”, that lead to higher productivity.

These “second-stage” benefits are not currently accounted for in the estimation of economic benefits of transit investment and could play an important role in the selection of future New Starts and Small Starts projects funded by the Federal Transit Administration (FTA).

Our role

Along with the Voorhees Transportation Center at Rutgers, The State University of New Jersey, Steer Davies Gleave aimed to develop an improved methodology for evaluating the economic impacts of proposed public transit projects.

How we did it

A primary focus of the work was enabling the quantification of the economic benefits of public transit due to the agglomeration of economic activities, which may expand labor markets and increase productivity.

Another component of the project involved case studies of three US cities in order to determine if and to what extent agglomeration benefits may have occurred as a result of recent transit investments.

The project resulted in a practical appraisal tool to help decision makers understand the implications of transit investments for city economies.

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