THE REGIONAL IMPACTS OF HIGH SPEED RAIL

A REVIEW OF METHODS AND MODELS

Guineng Chen
Joo de Abreu e Silva
CESUR, Department of Civil Engineering, Instituto Superior Tcnico, Lisbon
Technical University, Portugal

1. Introduction
The High Speed Rail (HSR) system has been proven to have the ability of
transporting large number of passengers more safely, comfortably and
efficiently, due to its high capacity, short travel time and good service quality.
And it has been introduced and planned in many countries for the past three
decades, such as France, Germany, Spain, Italy, South Korea and China etc.
after the success of the Shinkansen line between Tokyo and Osaka in Japan.
In Europe, it has been encouraged and financially supported by the European
Commission. Several lines are in operation, and many others are under
construction or waiting for approval.
HSR has been seen by policy makers as one of the major solutions to
alleviate the congestion of road and airport, and to stimulate the regional
economic growth and development. With the massive investment, HSR
project is often not justifiable on a short-term basis and viability merely
considering the gains in terms of travel demand, travel time, travel cost,
operational cost and safety etc. Therefore, the long term impacts are always
concerned by transportation planners and decision makers to justify additional
benefits from HSR projects. It is rather important to put efforts to prove the
effectiveness of HSR as a tool for regional development.
The introduction of HSR is considered to have spatial, social and economical
impacts on regional development, such as increase in employment, income,
production and changes in land use patterns (Vickerman, 1997, Banister and
Berechman, 2000). There are successful empirical studies confirming the
theoretical expectation of the impacts resulting from HSR. Nakamura and
Ueda (1989) found a high correlation between high growth rate of population
and employment and the presence of HSR stations. Bonnafous (1987) argued
that the arrival of the TGV in Lyon strengthened the citys business base. In
the longer term the impacts will take place indirectly through the
improvements in accessibility, which then enlarges the market areas,
increases the competitiveness and productivity of a connected region, and
thus attracts new economic activities, more labour participation, tourists and
residents. Although the spatial impacts of investments in HSR networks on
development are proven to be positive (Martin, 1997; Vickerman, 1997;
Gutirrez, 2001), there has been no clear consensus on their magnitudes or
scopes.
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Previous research mostly focused on empirically investigating the existence of

links between HSR and economical development, identifying changes in
commuting patterns, and proposing local and regional strategies to attract
population and new opportunities for urban development etc. The ones aiming
for modelling and quantifying the regional impacts of HSR integrally, such as
measuring the forecasted regional interaction of industries, households, and
land-use patterns are hardly found. To assess the regional impacts of the
HSR service, there are two major issues involved. First one is the contents of
the regional impacts and the indicators to represent them. Second one is how
the different indicators of regional impacts are interrelated and could be
quantified. Unfortunately there is no general agreement on the relevant
framework or appropriate methodology for evaluating the regional
development implications of HSR. Nor is there yet a standard methodology
that can link these impacts to policy objectives and goals for evaluation
purposes.
This paper aims to propose a conceptual model based on an extensive
literature review, which focuses specially on methods and models applicability
in the evaluation of HSR impacts. With these objectives, the paper is
structured as follows. The first section is a literature review which ranges from
transport infrastructure to HSR impacts. It is consisted of five different aspects,
namely the impacts on accessibility, employment, investment, production and
land-use patterns at regional level. The second section proposes a conceptual
model, which combines the individual impacts and jointly evaluates the overall
regional impacts of HSR. The implications of the model are also discussed.

2. Review on Regional Impacts of HSR

The provision of transport infrastructure could affect economic growth either
through its direct contribution as a factor input in the production or through
improving technological innovations (Aschauer, 1989b; Munnell, 1990).
Reduction of the distance impedance enlarges the potential market area, and
thus removes the bottlenecks in production and trade, and enhances the
economic integration (Blum, 1982; Rietveld, 1989). And, reductions in travel
time and travel cost can also give rise to productivity growth through the
reinforcement of agglomeration benefits (Venables, 2004; Graham, 2007).
However, the improvement of transport infrastructures may also entail the
uncertainty of the economic growth. One of the most important uncertainties is
the spatial distributive effects, arguing that reduction of transportation costs
and travel times may also give rise to substantial redistribution effects among
regions (Forkenbrock and Foster, 1990; Boarnet, 1996). The growth of some
regions may be the result of the deterioration of poorer regions. To
systematically identify the impacts of HSR on regional development, we thus
conduct an extensive literature review.
2.1 Review on Regional Accessibility
The first and foremost expected impact of HSR is through the increases in
accessibility. Finding a sound measurement of accessibility is quite difficult
and complex. As a result, many researchers and policy makers often use the
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measures, which are easy to compute, interpret and communicate, such as

travel time or speed, network density and congestion level etc. Sasaki et al
(1997) measured the accessibility from one region to another using the share
of Shinkansen line within the railway network between these two regions and
weighted it by the number of passengers. Li et al (2001) measured the
accessibility of a node in the rail network as the sum of the minimum physical
or time distances between this node and all the other ones. This type of
measure has advantages in terms of easiness in data acquisition, results
interpretation and communication. But it has the major disadvantage of not
reflecting the spatial component of accessibility, such as the amount,
distribution and type of the activities in the destination areas.
Accessibility measures should be consisted of two elements, namely the
attractiveness of potential destinations and the cost of reaching the
destinations. Following this concept, accessibility is then defined and used in
several ways. Gutirrez et al (1996) used weighted average travel time (GDP
being the weight) as the indicator to evaluate the impact of the future
European HSR network on accessibility. Later, Gutirrez (2001) used the
same indicator to measure the accessibility impact of the future MadridBarcelona-French border HSR line. This type of measure is not demanding in
data preparation, and the results are easy to be interpreted. But, it excludes
the distance-decay effect that implies the diminishing influences on
accessibility as the distances of opportunities increase. To incorporate this,
the potential accessibility measures are often used. They are widely adopted
in urban and regional studies (Hansen, 1959; Keeble et al. 1982). The
measure has the following form, assuming a negative exponential distancedecay function:

Where
is the generalized travel cost between zone i and j, and
the
opportunities in zone j. The disadvantages are related to more difficult
interpretation and sensitivity to the form of distance-decay function.
One common deficiency exists in the previous measures is the exclusion of
competition factors. In the long term, the changes will not only take place in
the values of impedance function, but also in the attractiveness of the regions
(van Wee et al, 2001). One type of competition factor is expressed as the ratio
between the opportunities reachable from zone i and the total number of
workers, who demand those opportunities in zone j from all the potential origin
zones (Joseph and Bantock, 1982; Shen, 1998: van Wee et al, 2001). In this
approach, the accessibility decreases if the labour supply of the catchment
area increases. It does not include the fact that labour supply expansion will
also attract firms and thus create more job opportunities. For this matter, the
second approach using the inverse balancing factors of the doubly
constrained spatial interaction model is adopted as an accessibility measure
(Wilson, 1971). A major disadvantage of this measure is that they are more
difficult to be interpreted, and the nature of the iterative procedure makes it
more complicated and time-consuming to compute.
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Previous measures analyze the accessibility of an area assuming that all parts
of a zone have the same accessibility as the centroid, and all the individuals in
a zone have the same level of accessibility. This assumption was criticized
because even in small zones significant variations in individual accessibility
could arise (Handy and Niemeier, 1997). These criticisms lead the way to the
development of individual accessibility based measures. One type of
individual accessibility measures is the activity-base approach. It incorporates
the spatial and temporal constraints, whether and how the individual or
household activity programs can be carried out considering the amount of
time for various activities at different locations and the time and speed
constraints they face (Hgerstrand, 1970). It has been used as a measure of
travel behaviour to better understand travel demand (Kitamura, 1997;
Bowman and Ben-Akiva, 2001). Even though the spatial modelling techniques
and the computational tools have substantially progressed, we still face
difficulties in operationalizing this type of accessibility measure due to the
intensive requirement of individual activity travel data, computational
complexity and lack of operational algorithms (Kwan, 1998).
Another type of individual accessibility measures is the Utility-based. It adopts
the denominator of the multinomial logit model, the logsum as the accessibility
measure, indicating the desirability of the full choice set (Ben-Akiva and
Lerman, 1985). It is based on random utility theory assuming that individuals
choose a particular destination through comparing the utility of all the potential
destinations. This type of accessibility measure is less data intensive and
easier to be computed compared with the activity-based ones. But, it does not
include the spatial-temporal constraints or only treat them at the morning and
evening peak level, and it is more difficult in interpretation and communication.
In our study, accessibility measures are seen as an intermediate indicator for
evaluating the economical impact of HSR service at the regional level. From
this perspective, the gravity-based and utility-based accessibility measures
are considered to be the most effective ones. The activity-based measure is
very useful and powerful for social evaluations, and it has the potential to be
used in economical evaluations if it could be tied to the utility-based approach.
The space-time prism is suitable for depicting the super-commuting effect of
HSR service. Under the same time budget, the residents would either
commute longer distance from their current residential locations to work in
better jobs, or move to a distant region with lower housing prices and
commute to their current jobs.
2.2 Review on Regional Production
Accessibility improvement reduces the time space frictions, which increases
the interactions between economic activities and thus makes firms more
productive. To investigate this relationship quantitatively, production function
is a widely adopted approach since 1970s. With this approach, Nijkamp (1986)
found that both transportation network and urban infrastructure give a
statistically significant explanation for regional production. Andersson et al.
(1989) found the impact of railroads on regional production to be stronger than
that of main roads in 1970s. Aschauer (1989b, 1990) demonstrated that a
core infrastructure (e.g. transportation facilities, water and sewer systems,
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electrical and gas facilities) have the strongest statistical significance in

estimated productivity relations. Munnell (1990) concluded that a decline in
public capital investment decreases productivity. The function is generally
expressed with Cobb-Douglas form:

Where, Q is output, A is the level of technology, K is the private capital stock,

L is labour and G is the stock of public capital. To be estimated with
regression, the equation is translated into logarithms form, producing a linear
function.
The problem of using traditional production functions is that the infrastructure
is treated simply as the stock of public capital for a factor input. In the case of
HSR, the impact may transcend the regional boundaries, for instance, the
region may not have the HSR station but can still benefit from the one in
adjacent regions. The existence of regional spillover effects for transport
infrastructures has been empirically proven (Pereira and Roca-Sagals, 2003;
Pereira and Andraz, 2006). To account for the network properties, one
effective alternative could be substituting the infrastructure endowment with
an accessibility indicator (Forslund and Johansson, 1995).
Besides the previous theories, there are attentions paid on the agglomeration
effects. The cumulative effect of transportation improvement increases the
market competitiveness, leading to a bigger market, industrial concentration
and thus, economy agglomeration. Firms are thought to be benefiting from
proximity to other more efficient firms, labour market pooling, sharing of
intermediate inputs, knowledge or technological spillovers (Fujita and Thisse,
2002; Venables, 2004; Graham, 2007). Ciccone and Hall (1996) estimated
that doubling employment density in a county increases average labour
productivity by 6 percent using the data of the United States in the year 1988.
Ciccone (2002) used the similar method for the data of European regions, and
found an elasticity of productivity with respect to employment density to be
around 0.045. Graham (2007) developed a measure of agglomeration and
included it in the production function. The estimated results showed that
agglomeration economies do matter and can be substantial, particularly for
services. The elasticity of production with respect to weighted average
urbanization is 0.129 for the whole economy, 0.07 for manufacturing and
0.197 for service sector.
The combination of the models proposed by Forslund and Johansson (1995)
and Graham (2007) may be suitable and effective for assessing the impact of
HSR on regional production, considering the introduction of HSR service
helps to improve the environment of the production more than directly
contribute to the production. The environment factor could be the result of
employment and population density in combination with the relative
accessibility. In the previous models, the initial production level and the
economic structure were excluded. Normally, the production level of previous
year might have consequences on the following year, and the contribution of
HSR varies from service oriented to manufacturing oriented economy. These
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two concerns could be reflected with the production of lagged year and the
shares of sectors in the production function.
2.3 Review on Regional Employment
Improving the accessibility leads to positive effects on labour participation and
labour migration. With the HSR service, an individual is able to travel over
longer distances to work. Kim (2000) used Gini coefficient, Wright coefficient,
and density function to analyze the impacts of HSR connecting Seoul and
Pusan, and found that employment opportunities and economic activity will
develop along a path of greater decentralization producing a dispersed
geography of economic space. To investigate the impact of transport
infrastructure on the employment, one popular approach is to formulate it as
such that regional employment
is a function of the regional characteristics,
such as wage rate , accessibility
and labour availability
etc.

This approach was widely adopted and the specification has been modified.
Dodgson (1974) developed a model relating real employment growth rates to
transport costs and to other variables, and then tested for a 30-zone area of
the North of England using multiple regression techniques. Similarly, Botham
(1980) used regression analysis to explain changes in zonal employment in
the years of 1961-66 in Britain. The conclusion showed that the road program
had a centralizing effect on the distribution of employment. A recent study
carried out by Ozbay et al (2006) investigated the effect of improved
accessibility on the local employment in the New York /New Jersey
metropolitan area with a similar method. The results showed that 1% in
accessibility improvement leads to 0.05% increase in employment. The major
problem in using these methods is that it may give a misleading impression
that increase in regional accessibility leads to a corresponding increase in
regional employment. The reason is that transportation improvement in one
region in general leads to an improvement in all regions, which does not mean
that the employment in all regions will increase. With this specification, it may
easily lead to an overestimate of the regional impacts of transport
infrastructure.
The problem was considered and solved by using relative accessibility
measure. Evers et al (1987) applied this concept to analyze of the effects of
the proposed HSR line Amsterdam-Groningen-Hamburg on the employment
by sector. Firstly, they translated accessibility into measured changes in the
economic potential by sector and region. Then they translated the economic
potential into employment changes assuming that the changes in economic
potential are directly proportional to their impact on the employment. Then the
net growth in employment was distributed according to the regional shares in
the total change in economic potential. And, the total effect of transport
infrastructure on employment is the sum of distributive and generative effect.
The proposed methods are limited within regression analysis, and after the
model proposed by Evers et al (1987) not much methodological improvements
have been made. Explaining the employment growth as driven only by
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accessibility improvement may exaggerate its power. One should conceive

the influential dynamics in a more realistic manner, noting that regional
employment is intrinsically related with other regional economic indicators,
such as production, private investment etc.
2.4 Review on Regional Private Investments
The improvement in regional accessibility, growth in the regional productivity
could induce more private investments to that region by expanding the
existing businesses and attracting new economic activities. Aschauer (1989a)
adopts a theoretical framework in which it states that public capital tends to
crowd out private investment if it substitutes the private capital in production,
and it tends to crowd in private investment, if the public capital serves by
raising the return to private capital. His empirical study using data from 1925
to 1985 in the United States demonstrated that the net effect of a rise in public
investment expenditure is likely to raise private investment. Erenburg (1993)
found that public infrastructure capital has an overall stimulating effect on
private investment. Guild (2000) confirmed this conclusion suggesting that
transport infrastructure will attract more private capital for being the
complementary input of production and making the industries more productive.
The existing studies have mostly focused on empirically investigating the
linkage between public infrastructure and private investment using regression
analysis. Rather few studies proposed a model for quantifying the effects of
HSR on regional private investments. A comprehensive analysis for this
particular aspect was only found in the study of Sasaki et al (1997). The main
idea of their model is that regional investment function is based on a twostage process as proposed by Crow (1979), in which national investment is
initially determined and then is distributed among regions according to their
relative efficiency and requirement for investment, such as the accessibility of
Shinkansen, expressway and ordinary road, as well as the relative regional
attraction that is expressed with a dummy variable. They found that
Shinkansen network expansion leads to regional dispersion from developed
regions only to some extent.
Based on the literature review, there are two problems. First, the initial
economic condition is critical yet usually ignored or reflected simply with an
over-aggregated dummy variable, hence results in under-estimation of this
factor or over-estimating the others. The existing regional industrial structure,
production and private investment levels etc. determine the initial perspectives
of the future investors. Second, the responses of regional policy to the advent
of HSR are very important, especially for the relatively poor regions. Adequate
planning and the implementation of economic development measures in
parallel with the connection to the HSR network can prevent the private
investments shifting to more competitive regions (Pol, 2003). This factor has
never been considered in any method, since it is easier to be used in the
qualitative arguments, but difficult to be reflected in the computational model.
These two issues should be well considered in later modelling process.

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2.5 Review on Land Use and Spatial Patterns

Transport infrastructure is an important location factor for households and
firms when relocation happens in the long run. In terms of firm location
decisions, better transport infrastructure reduces congestion costs, raises the
investment returns and therefore attracts new economical activities, allowing
greater agglomerations and higher productivity (Kessides, 1993; Weisbrod
and Weisbrod, 1997; Guild, 2000). Benefits of firm relocation may allow them
to provide new products or services at lower cost, or to serve the areas where
they were not previously available. For the location decisions of households,
lower transportation costs might cause households to migrate to the outskirts
or into other regions with lower house prices or with better living qualities.
Hansen (1959) first showed that a statistical relationship exists between
accessibility and the residential development. Nakamura and Ueda (1989)
found that the prefectures 1with a Shinkansen station have higher population
growth than the ones without. At the municipality level, the result is even more
significant.
2.5.1 Review on Firm Relocation

The spatial distributions of firms at regional level are normally reflected in

terms of regional private investment or employment. Higher private investment
and/or employment imply bigger agglomeration of economic activities in that
region. This issue has been discussed in section 2.3 and 2.4. Besides that,
there are some other methods using disaggregated data, such as interviewing
the location decision makers or estimating location choice models using
stated or revealed choice data.
Willigers et al (2003) conducted interviews among corporate decision makers
to determine how a change in accessibility due to a new HSR service is
perceived and what impacts HSR connections have on the firm location
choices. The results point out that accessibility factors are critical but cannot
be the only one determinant in the location decisions. Interviewing is an
intuitive and easy approach, and can provide valuable qualitative information,
but the results may be easily biased. For instance, the location decision
makers tend to give more positive opinions about their current locations, and
may also overestimate the importance of the new transport infrastructure
because of their high expectations for improvements to be carried out.
Willigers et al (2005) estimated discrete choice models to study the office
relocations within regions and cities in the Dutch Randstad area due to the
HSR service using both stated and revealed choice data. The analyses in this
paper are based on telephone interviews held among offices decision makers
and other employees who are involved in location decisions of offices. The
results showed relocations can be expected to be more intraregional than
interregional.

Japan has three levels of government: national, prefectural, and municipal. Each prefecture consists of
numerous municipalities.
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2.5.2 Review on Household Relocation

The household locations affected by investment in HSR could be directly

through the provision of better residential amenity, or indirectly through
stimulating the regional development, which result in attracting immigration
and preventing emigration. Generally, the residential location theory
expresses household location choice as a utility-maximization problem, in
which choice are primarily driven by the land price, transportation cost, public
services, and local amenity, given the budget constraints.
Quigley (1976) was one of the first who used discrete choice models for
housing location decision. He combined individual discrete choice model and
the characteristics of the housing market so that each household chooses a
location from a set of alternatives that maximizes its utility. This approach has
been widely adopted and improved in the later research. Friedman (1981)
extended the choices from houses to communities. He constructed a model of
residential location choice, in which each household is assumed to select the
community that maximizes the indirect utility function. It includes local public
services, neighbourhood characteristics, commuting distance and housing
services etc. This is inspirational for the analysis of household location pattern
at regional level. In principle, it is possible to apply the discrete choice model
of urban house locations to the regional level with appropriate selection of the
variables and modification of model structures.
At more aggregated level, Carlino and Mills (1987) considered that the
locations of employment and population are simultaneously determined and
conditioned by certain factors that affect the location behaviour of firms and
households. They assume equilibrium employment and population to be
related endogenously to each other and to a variety of exogenous factors.
Simultaneous spatial models could be used to investigate the relationships
between accessibility, population and employment. This type of model is too
aggregated to reveal the behaviour and perspectives of the location decision
makers regarding the transportation improvement. On the contrary, discrete
location choice models are able to capture the dynamics between the location
choices and the factors of location attractiveness. They help to study the
choice patterns and give information on to what extend these factors can
affect the location decisions at different scopes. And, with the help of stated
preference data, the impacts of hypothetical scenarios could be modelled as
well. Thus, discrete choice modelling is an approach that could be naturally
extended and modified for the use of studying interregional firm and
household location.

3. Conceptual Model
Drawing on the findings of the literature review, we can conclude that firstly,
the focus has to be paid specifically to HSR service at regional level, noting
that the significant positive correlations found on one type cannot be
generalized as the causal relationships for another, and the regional impacts
may not be as obvious as local or national level. Secondly, one has to bear in
mind that HSR has various levels of influence on different industries. It can
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play a crucial role in one industry but contribute rather trivial in another.
Thirdly, the linkages between HSR service and production, employment,
private investment and land-use patterns should be investigated jointly,
because accessibility improvement is not always the direct cause for the
growth of an aspect.
In this section, we derived a conceptual model framework as the basis for the
future research. This conceptual model has a systematic perspective, in which,
different aspects are represented with sub-models and interact in a global
environment. The interrelations of different sub-models are defined in order to
reflect the dynamics realistically.
3.1 Model Framework
Based on the extensive literature review, we thus draw a diagram to represent
how the provision of HSR service could potentially affect the regional
development in the long-term (Figure 3.1). The diagram basically illustrates
the dynamics between the five aspects at regional level, namely accessibility,
production, private investment, employment as well as the land-use and
spatial patterns.
With the inauguration of the HSR service, it reduces the generalized
transportation cost and improves the household amenity. With the reductions
in travel time and transport cost, it increases the accessibility for households
to services and economic activities, and the accessibility for firms to resources,
goods, and markets. The productivity of firms will be enhanced through
transporting the goods and people more efficiently and less costly and
expanding the market areas more profitably. And HSR service is also
considered as an improvement in production environment in the production
function theory, suggesting that this could lead to an increase in production as
well.

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Inauguration of
HSR Service
Lower
Transportation Cost

Easier Access
to Network

Increase in Relative
Regional Accessibility
Better Living
Condition

Change in
Land-use and
Spatial Pattern

Lower Production
and Transaction Cost

Attracted New
Households

Attracted
New Firms
New Service
Activities

More Labor
Participation

Growth in
Regional Production

Increase in
Regional Investment
Increase in
Labor Supply

Increase in
Labor Demand

Growth in
Regional Employment

Figure 3. 1 Relationship between HSR and Regional Development

It is not easy to explain the complex interrelationships between all the five
components. To be more logical and intuitive, we integrate them into the
analysis of interactions between labour supply and labour demand. Labour
supply in the influenced regions tends to grow due to the response of
accessibility and production improvement.

First, higher accessibility would enable workers to increase the job

searching area and commute longer distances for better jobs, thus
increase the inter-regional labour participation.
Second, in the long run, HSR service improves the amenity of
households, which leads to the relocations of the households from
other relatively underdeveloped regions, thus increasing the population.
Third, growth in regional production can stimulate employment
opportunities, which are bonded with attracting households, thus
increasing the population.

Therefore, HSR service could result in an increase in the regional population

size and labour participation, which in turn increases the labour availability to
supply the labour market. Labour demands of the influenced regions will also
grow thanks to the improvement in regional accessibility and production.

First, firms become more productive and may take the advantages to
serve larger markets that were not previously profitable for them due to
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the high shipping costs. To meet the raise in firm outputs, the demand
for workers will increase.
Second, the growth in the regional production could induce more
private investments to that region, and new firms also tend to locate to
the regions where they have higher labour supply.
Third, bigger population size and higher labour participation are always
accompanied by new service activities, which will inevitably enhance
the labour demand.

To sum it up, the interaction between labour demand and labour supply leads
to a higher regional employment level. The changes of land-use and spatial
patterns and the growth in private investments occur as a result of the
relocation and attraction of new households, new firms and new service
activities.
One must be aware that land price is a critical factor that limits households to
move from one region to another, and also discourages the entry of new
businesses and activities. And the introduction of HSR service tends to
increase the land prices of the influenced regions. To model these linkages
more realistically, the adjustment costs incurred by firms and households has
to be carefully defined.
3.2 Model Overview
This model is a simulation model of regional economic development subject to
exogenous national economic and demographic development and the
transport infrastructure investments, particularly the HSR service. It is
simulated with the combination of time-series and cross-section regressions,
with accessibility indicators being one of the crucial explanatory variables. The
regression approach used in the model aims to capture the empirical
relationships between different components and to assign concrete numbers
to each parameter and exogenous variable. The model has five forecasting
sub-models: Regional Accessibility, Regional Production, Regional Location
Decision, Regional Investment and Regional Employment. Figure 3.2 shows
the interactions between them.

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Regional
Accessibility Model

Regional
Accessibility
Location Choice
Models

Land-Use

New Population
Distribution

New Firm
Distribution

Service
Investment Model

Manufacturing
Investment Model

Service
Investment

Production
Function

Regional
Production

Regional
Investment Model

Manufacture
Investment

Regional
Investment

Regional
Employment

Figure 3. 1 Model Estimation Process

Regional accessibility is measured by a spatially disaggregate accessibility
indicator which take into account that accessibility within a region is not
homogenous but varies individually and accordingly decreases as the
distance to the HSR station increases. To account for the backwash effects of
relatively underdeveloped regions, concept of regional relative accessibility is
used as the explanatory variable in the model. The outcome of regional
accessibility model is then used together with the land-use factors to reflect
the improvement in production environment for regional production model.
To assess the impacts of accessibility and other attributes on the
attractiveness of locations for households and firms, two separate location
choice models are developed. The methodology of location choice model is
based on discrete choice theory, in which the decision makers choose an
option out of a set of location alternatives. With the data from observed or
revealed choices that decision makers made in reality, one thus acquires the
choice patterns. The outcomes are then used to forecast the new population
and firm distributions in the long-term due to the introduction of HSR service.
The forecasted distributions of households and firms are the critical inputs for
regional investment model, as the investment on service activities is closely
related with the population size and the investment on manufacturing sector is
bonded with the number of firms. In the regional employment model, it takes
the outputs of both regional investment and regional production model as its
essential inputs, considering that the levels of investment and production
directly impact the employment. The growth in regional employment in turn
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enhances the regional production and accessibility. The dynamic cycle is then
back to the initial and starts over.

4. Conclusions
This paper gives an extensive overview of the existing theories and
methodologies about how to assess the regional impacts of transportation
improvement. Drawing on the findings, a conceptual model is proposed
specifically for the assessment of regional impacts of HSR service. The model
inputs, expected outputs and the implications are discussed. The proposed
conceptual model has its innovative features on the realistic concerns and the
methodologies. Firstly, the linkages between HSR and the various aspects of
the regional development are represented with sub-models, which interact
with each other in a relatively realistic and dynamic manner. Secondly, the
model will be spatially more disaggregated than the existing ones. The
impacts on the different industrial and service sectors can be identified, and
the regional impacts are computed through aggregation from the municipality
level. Thirdly, the model not only captures the generative effects, but also the
distributive effects both intra- and inter-regionally. Distributive effects, such as
the relocation of households and the changes in employment and economic
activities, will be analyzed and transformed into operational indicators to be
incorporated into the sub-models. Therefore, this model is suitable to check
whether long-term tendencies in regional development coincide with
development objectives envisaged by the policy makers.
There are also disadvantages, such as the data required for this model is
enormous. Constructing the complete database may take large amount of
budget, time wise and financial wise. Another restriction of the model could be
that it does not produce the social welfare assessment that fits in the
framework of cost-benefit analysis. And, it does not exclude the fact that the
expected positive effects might not be as significant as expected due to the
redistributive effects and the reactions of the policy makers in anticipation of
accessibility improvement. The regional development may not fully respond to
the introduction of HSR services as expected during a short period of time, but
rather with a longer time period.

Association For European Transport and Contributors 2011

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