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Chicken or Egg? The PVAR Econometrics of Transportation

Gabriel M.  Ahlfeldt,  Kristoffer  Moeller,  Nicolai  Wendland,  March 2014
Paper No' SERCDP0158: | Full paper (pdf)
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Keywords: Transport, land use, Berlin, history, panel vector, autoregression

JEL Classification: R12; R14; R41; N73; N74

Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: SERC Discussion Papers
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Abstract:

To analyze the mutually dependent relationship between local economic performance and the demand for and supply of transport services, we employ the structural panel VAR method that is popular in the macroeconomic literature, but which has not previously been applied to the modeling of within-city dynamics of transportation. We focus on a within-city panel of Berlin, Germany, during the heyday of the construction of its dense public transit network (1880–1914). Our results suggest that economic outcomes and supply of transport infrastructure mutually determine each other. Both transport demand and supply seem to be driven more by firms than by residents.