The economic value of transport infrastructure in the UK: an input output analysis

Abstract

Transport infrastructure systems operate in, and are shaped by, the specific context in which they are expected to perform and contribute to the system-of-systems that support civilised life; they must strive to be sustainable and resilient. However, transport, one of the economic infrastructures, is viewed narrowly in political circles as a vehicle for economic prosperity: political focus falls on the economic pillar of sustainability. One perennial challenge concerns the inclusion of social and environmental value into such performance judgements. A deep understanding of system interdependencies is essential when comparing input output tables (a top down approach) with cost benefit analysis (CBA, a bottom up approach). CBA works best when there is adequate information to calculate a monetary value for all economic, social, and environmental outcomes, whereas input output tables are most effective when environmental and social value are kept distinct from economic value and where the beneficial economic impacts extend across multiple sectors (CBA is inadequate in this regard). This research uses the World Input Output Database and principal component analysis to develop a model to capture this complex accounting process.In recognising how past interdependencies inform future development, this study s model provides new insights into indirect economic value creation within infrastructure systems.