This literature review is devoted to three articles supporting the subject of our current interest, which is the impact of transit on local economy. We provide an overview of each article and evaluate their significance for our study. The first article discusses the benefits of light train transit (LRT) in terms of employment rates and urban development. The second article states the negative correlation between bus market situation and fuel economy in the US. The third article encompasses the ideas stated in both articles as exemplified in transit systems in Washington, DC; it argues that both areas of public transit, taken individually or combined, have a positive impact on local economy.
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The Impact of Transit on Local Economy: Literature Review
The modern life would be impossible without transportation system. Although the vast majority of the recent researches are devoted to the significance of the issue regarding the extensive usage of vehicles and the negative effect of the fossil fuels on the environment and human health, it should be pointed out that the impact of transit on the local economies should not be undervalued.
The major purpose of the paper is to provide the review of the articles connected to the importance of the usage of the light rail transit and public buses, and what impact they have on the economy. The paper focuses on three articles, namely Public transit bus procurement: The role of energy prices, regulation and federal subsidies by Li, Kahn, and Nickelsburg, Transit in Washington, DC: Current benefits and optimal level of provision written by Nelson, Baglino, Harrington, Safirova, and Lipman, and Light Rail Transit in Hamilton: Health, Environmental and Economic Impact Analysis by Topalovic, Carter, Topalovic, and Krantzberg.
The article by Topalovic, Carter, Topalovic, and Krantzberg (2012)
Light rail transit provides a number of benefits. Aside from the reduction of the pollution of the environment, the system of the light rail contributes to the cutback of the traffic. The article by Topalovic, Carter, Topalovic, and Krantzberg (2012) is devoted to the impact light rail transit (LRT) has on environment, health, and economics in Hamilton, Ontario. The article also briefly overviews the land value effects since it adds up to local economic sustainability. The authors evidentiate that LRT positively correlates with the land values even on the development stage.
The development of LRT contributes to local economics by boosting investments; there is an opinion, however, that the LRT will negatively affect local economy since the vibrations can damage property and reduce its cost. Nevertheless, LRT is approved of by the authorities. Besides, the authors state, the LRT can enhance the employment situation locally by attracting workers willing to move to cities near their workplaces. The authors conclude by stating the benefits of LRT: among others, they enlist the reduce of vehicle and healthcare prices, new jobs, and urban sprawl (Topalovic et al., 2012).
Among the strong points of this article that lie within our current interest, it is worthwhile to mention the deep insight into the issue of land value; the authors give account of the LRT increasing the land value before they are even built. Another positive point is that the authors make a deep analysis of the impact of the LRT on local employment: they draw a parallel between the LRT usage and urban sprawl which is only beneficial on the local scale. Thus, the article contributes to our study by demonstrating the positive impact of light rail transit on local economy.
The article by Li, Kahn, and Nickelsburg (2015)
In contrast to the light rail transit, the system of the public busses sometimes can lead to the traffic disruption and is costs consuming. The article by Li, Kahn, and Nickelsburg (2015) discusses public buses as a crucial part of public transit system. They base their analysis on the fact that no improvements have been made in the buses’ fuel economy. They assert that the stagnation is influenced by several factors. Firstly, there is a demand among not-for-profit transit organizations for federation-subsidized costly buses bought with the help of Buy American mandate.
Secondly, the bus market is supplied mostly by local producers, with the import tending toward zero; this causes a poor market competition with not enough stimulus towards less fuel-consuming vehicles. Thus, both sides taken together make fuel economy irresponsive to fuel costs, the authors state. If the Buy America mandate allowed for import, the buses would cost less; besides, the quality of the transit services would improve, thus causing the increase in demand, which is nonexistent in the current conditions (Li et al., 2015).
Among the strong points of the article we shall mention its critical analysis of the bus market situation, supported by thorough investigation in terms of bus scrappage, purchases, and fuel type. The authors also explain the ways state economy is affected by the stagnant fuel economy, with the fuel costs increasing and triggering extra public transit expenditures. The one and major drawback of this article is the excessive specifications the authors provide discussing the prices of each individual fuel brand, thus complicating the perception of the main idea. However, the article contributes to our study by explaining the congestion in fuel economy through bus market situation.
The article by Nelson, Baglino, Harrington, Safirova, and Lipman (2007)
The comparison of the implementation of the light rail and buses is beneficial for the better evaluation of the effects that the systems have on the local economy. The article by Nelson, Baglino, Harrington, Safirova, and Lipman (2007) can serve as a counterpoint between the first two since it compares the impact of bus and rail transit on local economy. The authors account for an opinion that it is wasteful to invest into public transit, be it train or bus, since the amount of transit uses in on the decrease. Besides, public transit is said to be damaging local economy by paying excessive wages. Others believe transit is beneficial for urban areas and predict a demand for it due to the increase of fuel costs.
The authors apply a microeconomic-oriented theory developed for Washington and define the benefits of transit. They find out that rail transit compensates for the subsidies since it reduces overcrowding on the roads. As for the combined advantages of bus and rail transit, they are able to refurbish what has been subsided and surpass it. The authors conclude by asserting that the current ratio of bus to rail transit systems is optimal (Nelson et al., 2007). This article is significant since it incorporates ideas stated in the previous ones. It also provides a multisided approach to the bus and rail transit and advocates for positive impact of public transit on local economy.
In conclusion, it should be highlighted that it is significantly important to compare the impact of the light rail transit and public buses to get deeper involved in the issue. The discussed above articles provide the better understanding of how the transit influence the local economy.
Li, S., Kahn, M. E., & Nickelsburg, J. (2015). Public transit bus procurement: The role of energy prices, regulation and federal subsidies. Journal of Urban Economics, 87, 57-71.
Nelson, P., Baglino, A., Harrington, W., Safirova, E., & Lipman, A. (2007). Transit in Washington, DC: Current benefits and optimal level of provision. Journal of Urban Economics, 62, 231-251.
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Topalovic, P., Carter, J., Topalovic, M., & Krantzberg, G. (2012). Light Rail Transit in Hamilton: Health, Environmental and Economic Impact Analysis. Social Indicators Research, 108(2), 329-350.