Wider economic impacts of transport investments

The economic impacts of transport improvements can be classified into three types. First are the direct benefits of the improvement in terms of vehicle operating costs, timesaving, and other benefits to existing and new users, together with the costs of noise and pollution produced. Second are the economic benefits deriving from better connectivity, holding constant the spatial distribution of economic activity; for example, the flow of knowledge between places may improve with benefits for productivity. Third are the changes in the location of economic activity arising as transport improvements change the spatial pattern of private sector investment; new investments may be induced in some places, possibly at the expense of other places. A standard cost-benefit analysis covers the first of these, and wider economic impacts analyse the last two.