Appendix 1: Annotated Bibliography (Page 3 of 3)

Investment and Financing Policies:

• Economic analysis.

• The purpose of this paper is to investigate the impact of public infrastructure on private production cost and total factor productivity (TFP) in Germany.
• A flexible functional form of a cost function with public infrastructure as an additional external input is used to estimate the shadow-price of public infrastructure services for the manufacturing, trade and transport and the construction industries.
• The model has been estimated using annual data for the gross national output for the considered industries for the period 1961-1988.
• The estimation results suggest that public infrastructure contributed to TFP and that it is an important complement to private investment activities.
• Although infrastructure is a free public good, a considerable "aggregate" willingness-to-pay for this good by the private industry is estimated. It is about 0.15 in the period 1960-1976 and declines to 0.11 in the period 1980- 1988. This might be interpreted as a relative decrease in the demand for additional public infrastructure.
• The econometric results suggest that infrastructure capital is labor saving but private capital intensive.
• It has been shown that disregarding the provision of public capital in TFP measurement leads to biased results and that this "neglected" input is also at least a partial explanatory factor for the generally observed slowdown in productivity growth in Germany.

Investment and Financing Policies:

• Economic analysis.

• This paper studies the productivity of public investment within the context of a neoclassical growth model. A wide range of estimates of public-sector and private-sector investments is employed in evaluating this model.
• The data are disaggregated at state and metropolitan level. The period 1960-1977 is used as a benchmark to standardize the estimations. However, conclusions regarding public capital are not changed when other periods are considered.
• The obtained model estimations indicate that public infrastructure, however measured, has at most a modest effect on factor markets, and an even smaller impact on growth in per-capita income.
• Most infrastructure coefficients in the growth models are statistically insignificant.
• In most of the cases the implied production elasticity for private capital exceeds those for public infrastructure.
• Neither state nor local investments lead to growth in per capita income.
• A inference is made that there are no substantial unexploited externality gains from public investment. It is based on the fact that local infrastructure contributes more to growth than does state infrastructure.
• It is concluded that public infrastructure surely plays an important role in metropolitan economies. However, its marginal contribution is no more than, and may be less than, other forms of investment.

Investment and Financing Policies:

• Economic analysis.

• A cost-function model is used to conduct a detailed investigation into the role of state infrastructure (publicly owned highway, water, or sewer capital) in determining state productivity performance.
• This analysis is based on cost-side marginal products (shadow values) and productivity-growth measures. Shadow prices are computed as the potential cost savings from a decline in variable inputs (and thus costs) required to produce a given amount of output when infrastructure investment occurs.
• The model is estimated using data on the manufacturing sectors of the 48 contiguous states in the United States for 1970-1987.
• The results indicate that the return to infrastructure investment is significant: shadow values for public capital are both positive (although lower than for the private capital) and significantly different from zero. These positive shadow values are consistent with a positive marginal product for infrastructure, as well as a significant role for infrastructure in determining productivity growth.
• The positive input-cost-saving benefit to manufacturing firms from infrastructure investments declines in all regions between 1970 and 1980, with the most dramatic declines being in the North and East regions.
• The results suggest that the net return to investment in public infrastructure accruing specifically to the manufacturing sector could be close to zero.

Regulation and Institutional Environment

• Industry Structure and Competitiveness

• This study investigates the internationalization processes of freight transportation companies in Sweden.
• Main reasons for studying internalization of transportation firms: (1) increased importance of international distribution systems; (2) impact of deregulation and harmonization on transportation industry; (3) applications to other service industries.
• The purpose of this study is threefold: to develop a model of internalization, applied to transportation firms; to describe and analyze international patterns of transportation companies; and to explain these patterns.
• Research method: (1) case studies, (2) 32 interviews with transportation companies, and (3) a dynamic model of internalization.
• The book first gives some background and introduces basic concepts about the freight transportation industry.
• Next, theoretical framework and the model of analysis are presented, followed by the case studies description and analysis. A dynamic model of the internalization of freight firms is constructed. Finally, theoretical results and managerial applications are discussed.

Several questions for further research are then posed:

• To what extent can the network model of internalization be generalized and applied to other companies?
• What is the role of the economies of scale and scope in the internalization process?
• What is the role of the high interdependence between transportation firms called "domino" effect?

Investment and Financing Policies:

• Economic analysis;
• State funding.

Regulation and Institutional Environment:

• Intramodal transport.

• The question of trends in international traffic and infrastructural needs is central to European transportation policy because (1) international traffic is the most dynamic component of total traffic, and (2) international traffic is crucial for the economic and social integration of Europe.

Changes in the nature of problems and in ways of resolving them:

• Transport embraces multimodal techniques and has to take account of effects on the natural and human environment.
• The institutional framework is more complex.
• Introduction of managerial practices aimed at eliminating "unnecessary" transportation operations.

Solutions proposed in this report:

• Improving the methods in order to promote informed approach to the planning of international infrastructure.
• Classification and ranking of possible policy measures at international level.
• Compatibility and harmonization of the national measures taken in respect of international traffic.
• Opening European transportation networks broadly to the East towards Baltic and Black seas.
• Multimodal approach toward international traffic.

Investment and Financing Policies:

• Communication and information technologies.

National and International Assistance:

• Logistics Management.

Objectives of this study:

• to summarize national experience in the fields of logistics, physical distribution and communications;
• to identify innovations in the electronic exchange of data and information;
• to analyze changes in the freight and warehousing industries, and;
• to highlight the major developments determining the future role of government.
• The main purpose of this report is to review the present status and evolution in logistics operations, and to point out the future implications for road freight transport and infrastructure in general.
• The report presents and assesses logistics situation in three major OECD countries. Evaluations are based on case studies selected from diverse sectors.
• A macroeconomic analysis of freight industry and infrastructure is performed based on numerous statistics.
• The microeconomic analysis aims to identify the impact of the developments in communication and information technologies on the firms involved in shipping, transportation and warehousing.
• The report shows how advanced logistics is emerging in developed countries.
• Finally, various government policies facilitating development of advanced logistics are considered.

Investment and Financing Policies:

• Communication and information technologies.

Regulation and Institutional Environment:

• Intramodality and intermodality;
• Industry structure and competitiveness.

• This study sets out the existing pattern of freight transportation within Europe.
• Freight transport within Europe and between Europe and the rest of the World is frequently a multi-modal activity.
• The key factors likely to influence the European freight transport suggest increasing demand for its services.
• An important trend, which will have a bearing on the way European freight transport develops, is the emphasis placed on environment and other external costs.

Barriers to development of freight transportation:

• Common transport can be only applied to a relatively self contained area, which European community is not.
• Attitudes and approaches to transport differ among European states.
• The nature of transport systems within Europe varies considerably among countries.
• Institutional problems.

Policy responses:

• International coordination and integration, which must be strategic in its orientation and flexible in its implementation.
• Encouragement of modally integrated transport.
• Increased emphasis on more soundly based policies regarding the funding and charging for the use of transport infrastructure.
• Privatization of transportation infrastructure and activities.

Investment and Financing Policies:

• Communication and information technologies.

Regulation and Institutional Environment:

• Intramodality and intermodality;
• Industry structure and competitiveness.

• The most dynamic regions in Europe are likely to be those where the transportation and information networks link in with other factors such as a skilled labor force, a high quality environment and the availability of low-cost land.
• The complicated interrelations between the different modes of transport are introduced together with the key European problem of the well-integrated center and the remote periphery.
• True Europe integration is dependent upon completing the Pan-European network missing links and networks.
• Several methods for analysis of networks are considered: contribution network modeling, so-called MITER model and a regional econometric model of economic growth in the Italian economy, model of business trip distribution in Europe incorporating transportation barriers.
• Different regulatory regimes in the transportation sector are examined, focusing on franchising systems.
• The concept of maximum environmental capacity use is developed. It can be summarized as the maximum resource use of given environment capital stock compatible with socioeconomic and environmental conditions.
• Finally, arguments for and against network diversification and fragmentation are examined.

Investment and Financing Policies:

• Communication and information technologies.

Regulation and Institutional Environment:

• Intramodality and intermodality;
• Industry structure and competitiveness.

• Main problems related to road transport in Europe are the congestion on major international traffic arteries and the problem of the Alpine barrier. The first of these problems is due to a lack of capacity of existing networks.
• A partial solution to the capacity problem may come from the reduction in waiting time at the customs.
• The logistics in European road haulage is a big issue. A proposed solution is a centralized information system on goods transported on roads.
• One of the reasons for the number of empty vehicles adding to the congestion of the European network is the structure of the transport sector and the organization of transport and logistics by big firms.
• There is a case for deregulation and privatization in rail and combined transport. The main questions in this field relate to the new organization, the logistics, and the financing and regulatory regimes by governments.
• In European freight transport the trucks and delivery vans are the dominant means of transport. It is foreseen that this imbalance in modal split will continue to grow, as will freight transportation.
• At present, growing congestion is not sufficient condition to increase the demand for combined transportation. Only in combination with a removal of the vast amount of bottlenecks, internalization of social costs and in some cases explicit regulation will road congestion act as a bias towards combined transportation.

Investment and Financing Policies:

• Communication and information technologies.

Regulation and Institutional Environment:

• Intramodality and intermodality;
• Industry structure and competitiveness.

• The main argument of this book is that the European transport policy rests on the national transport policies and national governments. This does not provide an appropriate framework for resolving dilemmas in transport with respect to economic efficiency, social justice and environmental quality.
• In the case of road transportation a strategy is designed to strengthen the single market in transport and force road transport users to pay the full costs of their activities.
• In the case of rail transportation the policy aim is to renew the rail as an important mode of transportation since it is believed that railways can compete effectively with other modes reducing congestion, environmental damages and regional imbalances.
• In the air transportation new legislation enables airlines to obtain access to any route. In practical terms, however, this freedom may prove illusory due to capacity constraints and various company devices.
• The development of an efficient multi-modal transportation system in Europe could partially achieve some of the central objectives of the transportation policy through improving efficiency, filling the missing links and transferring traffic to less congested modes of transport.
• Development in transportation infrastructure will take place mainly on the major European routes and in the center regions.

Investment and Financing Policies:

• Federal and State Financing.

National and International Assistance:

• Logistics Management.

• During the month of June 1999, in-depth interviews were conducted with representatives of 61 Portland-area manufacturers, distributors and carriers.
• The interviews aimed at gaining a better understanding how highway service affects logistical decisions and costs of the area's shippers and carriers, and to identify the bottlenecks of the existing highway system.

Main findings of this study:

• Many firms find it difficult to cope with increasing congestion. Some businesses responded to increased congestion by relocating and flexible shipping patterns
• The segment of I-5 that is the focus of this study and the access to Portland International Airport are identified as the most problematic highway stretches.
• Some businesses believe that today's congestion is tolerable. They are also convinced, however, that the process of highway improvements should start now, otherwise congestion would affect their productivity and competitiveness.
• With a 20 percent improvements in travel time and reliability at least six percent of the firms would restructure their logistics and distribution process.
• The region-wide benefits from logistics restructuring are estimated to be between $584 and $1,046 million in 1997 prices over the next 30 years.

Investment and Financing Policies:

• Federal and State Funding.

Regulation and Institutional Environment:

• Economic incentives (road pricing).

• This paper examines the link between highway congestion, labor productivity, and output in a sample of California counties for the years 1977 through 1988.
• A county production function is modified to include both the value of each county's street and highway capital stock and a measure of the congestion on each county's highway network.
• The study compares two distinct policies – expanding the street and highway stock versus reducing congestion on the existing stock.
• The econometric evidence suggests that congestion reduction is productive. The effects of expanding the street and highway stock are more dubious.
• Overall, the results provide evidence that using existing street and highway infrastructure more efficiently can produce economic benefits.
• This research reinforces the importance of pricing highway infrastructure to reduce congestion and, hence, use existing infrastructure more efficiently.
• The obtained elasticities further suggests that congestion reduction policies should focus on those places that are most congested.

Investment and Financing Policies:

• Economic Analysis;
• Federal and State Funding.

• This paper examines the possibility of negative output spillovers from public infrastructure.
• A model of productive public capital shows that, when input factors are mobile, public infrastructure investment in one location can draw production away from other locations. In a linear production function framework, this effect would be manifested as a negative output spillover from public capital.
• Using data for California counties from 1969 through 1988, negative spillover effects are shown to exist in the case of street and highway capital. The regression results show that changes in county output are positively associated with changes in street and highway capital within the same county, but output changes are negatively associated with changes in street and highway capital in other counties.
• Highway projects are often funded with large state and federal subsidies. The results in this paper suggest the possibility that local projects might draw economic activity away from areas that are helping to subsidize the project.
• Overall, this study suggests that both research and policy should more carefully consider the local gains and losses created by public capital projects.

Investment and Financing Policies:

• Economic Analysis;
• Federal and State Funding.

• This article reviews the recent literature on public infrastructure and economic productivity, with special attention to the particular case of highway infrastructure.
• The presented findings suggest that, at the margin, highway infrastructure have little effect on national or state productivity. This is consistent with the studies that show relatively small land-use impacts from modern highways.
• Both productivity and land-use studies suggest that highway building in the United States has entered a new era. The interstate highway system is essentially complete, and, in many urban areas, the network externalities of further highway construction have been largely exhausted.
• Highway projects that appear to generate large amounts of growth either may not actually cause that growth or may cause it in part by shifting economic activity from other areas.
• Either explanation implies the need for reforms in highway project analysis and funding. This article suggests appropriate policy reforms and directions for future research.

Investment and Financing Policies:

• Economic Analysis;
• Federal and State Funding.

• This paper suggests, based on recent empirical evidence, that highways are associated both with local economic gains (often near a project) and economic losses (often distant from a project).
• In a system of centralized highway finance, this creates the possibility of a geographic mismatch between the areas that pay for highway projects and the areas that benefit from those projects.
• Efficiently using the available highway capital is potentially as effective as building additional highway stock in enhancing the local impacts of highways.
• These ideas suggest the need for more decentralized, project-specific highway finance that includes a role for efficient pricing.
• This paper summarizes its policy recommendations in two rules of thumb. First, there should be a geographic correspondence between who funds highway projects and who benefits from the infrastructure. Second, efficiently using the available highway infrastructure should become a more prominent policy objective. Both can be achieved by encouraging the current trend toward more localized highway finance.

Investment and Financing Policies:

• Economic analysis;
• Federal and State Funding.

• The study examines the contribution of two alternative types of highway capital to output growth and productivity of 35 U.S. industrial sectors for the period 1950-1989.
• The measures of highway capital, used in the research, are (1) total highway capital and (2) non-local highway system (NLS) capital. The NLS capital is total highway capital minus local investments in roads and streets.
• The magnitude of the elasticity of output with respect to total highway capital at the aggregate level is about 0.05. This number is much smaller than comparable estimate previously reported in literature.
• The contribution of highway capital to total factor productivity (TFP) is positive in almost all industries, except in some non-manufacturing industries.
• The results suggests that an increase in total highway capital or NLS capital leads to a reduction in demand for all inputs in manufacturing, while in non-manufacturing industries the pattern is mixed.
• The net social rate of return on total highway capital was high (about 35 percent) in the 1950s and 1960s, then declined up until the 1980s to about 10 percent. The same is true for NLS capital, although its current rate of social return is higher – about 16 percent.
• The main contributors to productivity both at the industry and aggregate levels are exogenous factors that shift industry demands such as income and population growth. Highway capital contributes to long run trend TFP growth.

Regulation and Institutional Environment

• Intramodality and Intermodality;
• Industry Structure and Competitiveness.

• This report explores changing freight transportation intermodal connectors in the U.S. Transportation System.
• The term "intermodal" is defined as a transfer of shipment from one transportation mode to another as the shipment moves from origin to destination.
• The nature of transportation demand has changed to meet the new needs of business and consumers.
• Changing business practices include the restructuring of traditional manufacturing; product shifts; production runs and JIT; reducing the length of product cycles; "lean manufacturing"; the emergence of high technology and knowledge-based industries; the globalization of the economy; focusing on core competencies within a firm (outsourcing); and focusing on transportation characteristics rather than modes and routes.
• It is identified that firms seek five qualities in their freight transportation service – reliability, transit time, efficiency, cost and damage minimization.

The Responses of the Transportation Industry

• Today's shipper needs emphasize reliable, fast freight service, but cost remains an important component.
• Transportation providers have responded with more aggressive competition, as well as mergers and alliances.
• Innovation and standardization.
• In-transit visibility and flexibility.
• Using the best combination of modes.
• The opportunities for and barriers to achieving intermodal connector goals are finally discussed.

Regulation and Institutional Environment

• Intramodality and Intermodality;
• Industry Structure and Competitiveness.

• This report presents the input received by the U.S. DOT at four regional meetings addressing the question of how the growth in worldwide containerized trade and the expected growth in volumes of freight handled by major container ports will place additional demands on the U.S. transportation system.
• The meeting paid particular attention to the introduction of large containerships (megaships) and their potential impact on freight transportation within U.S.
• The fundamental issue addressed in these conferences was how improving infrastructure links to ports is a crucial prerequisite for transportation to function as a system.
• There are three major national public policy issues raised by the prospects of extremely large containerships: the historic and ongoing deregulation of the transportation industry, the devolution of transportation programs, and the need for optimizing national freight movement system.
• The report concludes that action should be taken to craft policies to position U.S. transportation industry to handle the significant increases in international freight movements and the infrastructure demands of the changing trade flows.
• The report acknowledges two ongoing activities within U.S. DOT that will address the transportation system's accommodation of increased future volumes of international intermodal freight: (1) Waterway Management Initiative; and (2) Assessment of the Conditions and Performance of National Highway System Intermodal Connectors.

Regulation and Institutional Analysis:

• Intramodality and Intermodality;
• Economic Incentives.

• This study examines whether shippers of domestic surface freight pay the full social costs of the services they use.
• The study uses the concept of marginal social costs in measuring whether fright users are subsidized or not.
• If the marginal taxes that a shipper or carrier pays for each shipment equal the marginal costs that the shipment imposes on others, then the shipment is paying its way.
• Historically, the trucking industry has been reasonably satisfied with the government cost recovery approach, whereas railroads and environmentalists have advocated the use of marginal social cost.
• Cost recovery often is an important objective of policy makers in setting fees for government transportation facilities. If cost recovery is the goal it is possible to design fee schemes that provide the required revenue without sacrificing all the efficiency incentives inherent in the marginal cost approach.
• Four case studies have been developed to estimate whether freight shippers are paying their marginal social costs for specific freight movements. These case studies reflect a wide range of situations, but they are not intended to represent a majority of shipments in the United States.
• Important uncertainties in the estimates must be kept in mind when drawing policy recommendations.
• The recommendations are in three areas: first, research needed to close several critical data gaps; second, expansion of the case study analysis; and third, consideration of the policy implications of external costs and subsidies.

Regulation and Institutional Analysis:

• Intramodality and Intermodality;
• Economic Incentives.

• Governments are reexamining the scope of their involvement in freight transportation, investing in facilities not traditionally provided by the public sector, and entering into new kinds of arrangements with the private sector.
• Government should apply standard methods for evaluating infrastructure investment proposals. The performance of completed projects should be systematically evaluated according to established guidelines.

Options for provisions of federal surface transportation programs aimed at improving intermodal freight efficiency:

• Use of highway trust fund for non-highway freight projects.
• Project selection and priority for freight projects.
• The U.S. DOT identifies a category of projects of national significance in which government involvement is justified.

Regulatory and operational issues:

• Government can facilitate the application of information technology in freight in areas such as customs and enforcement.
• It should be examined how economic regulation of ocean and coastal shipping affects freight performance.
• Improved pricing of transportation facilities operated by government would yield payoffs in improved efficiency.
• Mechanisms established for project finance can help ensure that necessary and valuable projects are built and that government avoids participation in projects with low payoff or little public significance.

Regulation and Institutional Analysis:

• Intramodality and Intermodality.

• The Chicago Area Transportation Study (CATS), as a metropolitan planning organization, developed an approach to integrate intermodal freight transportation into regional plans and programs.
• This process began with the establishment of the Intermodal Advisory Task Force (IATF) in 1994 and led to a series of freight-oriented series and products. They include the identification of regionally significant facilities, analysis of improved needs, and the intermodal component of the 2020 Regional Transportation Plan (RTP) for northeastern Illinois.
• The IATF established four working groups that directed specific tasks. These tasks were development of a geographic information system-based intermodal facilities inventory, an outreach for industry needs, a review of proposed intermodal improvements, identification and analysis of intermodal connections to the national highway system, and analysis to estimate the economic value of the industry to the region.
• `Ultimately six policy statements were developed and incorporated as system-level intermodal recommendations in the RTP.
• The process developed by CATS through the IAFT has "mainstreamed" intermodal freight issues, analysis, and policies into the transportation plans and programs of northeastern Illinois.

Regulation and Institutional Analysis:

• Intramodality and Intermodality.

• Traditionally, the operative and normative practices of motor transportation in the three countries that are part of the North American Free Trade Agreement (NAFTA), Mexico, the United States, and Canada, have been substantially different. In order to make transport more efficient it is necessary to standardize such practices.
• Truck size and weight regulations in the three NAFTA countries are reviewed. A series of vehicles are ranked according to their transport productivity and their circulation possibilities through the part of the Mexican network that is most relevant to Mexico's international commerce with the United States and Canada.
• The analysis includes the most commonly used vehicles authorized by federal regulations and others that are authorized only regionally but whose more extensive utilization could mean important productivity gains for the freight motor industry.
• The vehicle types that are most convenient to use considering the current conditions of Mexican roads are identified.
• Other recommendations for making motor transport under NAFTA more efficient are addressed.

Regulation and Institutional Analysis:

• Intramodality and Intermodality.

• Planning procedures used in addressing freight components for Louisiana's statewide intermodal transportation plan is described. User and provider involvement, demand analysis, network analysis, and recommended policies for the water, rail, and intermodal freight components are presented.
• Analysis of future demand for facility capacity has been performed in three steps. First, baseline historical patterns have been established through extensive processing of data obtained. Second, volume forecasts for 11 major commodity groups have been made for each of three possible growth scenarios. Third, a strategic outlook has been developed for selected commodity types to examine market structure, productivity trends, and the competitive position of transportation providers in the state.
• Network capacity analysis has identified few bottlenecks in the state's main line waterway and railroad networks.
• A comparative analysis of maritime terminal productivity and cost was has been performed to assess the competitiveness of ports in Louisiana.
• An extensive survey of the physical, operating, and institutional characteristics of terminal roadway and roadway access has been made.

Regulation and Institutional Analysis:

• Intramodality and Intermodality.

• AASHTO, in cooperation with NCHRP, has initiated a series of research studies dealing with the issue of multimodal transportation planning. This paper comments on some of the findings from one project in this series. This project focuses on the dynamics of partnership formed to carry out the planning, design, and implementation of multimodal and intermodal projects.
• An intensive industry scan has been completed, resulting in an interactive database of approximately 60 multimodal projects throughout the country. From these 60 projects, 12 have been selected for more intensive study through a case study approach.
• One finding from the case studies is that local governments and private sector partners must be included in earlier stages of multimodal transportation planning than is currently being practiced.
• One of the key hypotheses tested with the data available on these partnerships has been the impact of the ISTEA Act of 1991 as a catalysts to stimulate multimodal projects and to improve multimodal planning process. In this regard the study finds that before 1990s, it appears that a major emphasis of partnership formation was simply to secure funding from a variety of sources for such projects. Since ISTEA was passed, however, objectives more frequently cited by partners relate to meeting societal values and traveler needs.

Regulation and Institutional Analysis:

• Intramodality and Intermodality.

• An area of increasing concern to policy makers is the relationship among international service, terminal location, and the surrounding highway network. A better understanding of their impact on the relative costs of intermodal versus single-mode freight movements is needed.
• The authors have undertaken a series of structured interviews with providers of intermodal services and have incorporated the information provided into a cost model.
• The model allows the boundary conditions between intermodal and highway shipments to be examined. It is also possible to explore how costs affect factors such as terminal location, access difficulty, and shipper distribution about the terminal.
• Using the model, three cases are evaluated: (A) variations in customer location, (B) variations in the type of customer pickup and delivery, and (C) changes in terminal efficiency.
• Cost data are obtained through a study of the I-95 corridor along the eastern coast between the mid-Atlantic states, Florida and Georgia
• The study concludes that the drayage and terminal inefficiencies that can be readily absorbed in long-haul moves – 900 to 1200 miles – cannot be absorbed in short haul markets that were studied.
• Results also identify the importance of the proximity of an intermodal terminal to a shipper. Terminal congestion is found to be a factor in short-haul markets, in which lengthy delays can eliminate the cost benefits of intermodal movements of freight.

Regulation and Institutional Analysis:

• Intramodality and Intermodality.

• This report evaluates the status of intermodal freight in the U.S. with reference to infrastructure access such as inadequate highway connectors and facility clearance, and terminal capacity constraints affecting levels of service.
• Though the overall performance of the intermodal freight system is impacted negatively by access and capacity impediments, the study findings point to a significant congestion mitigation effects from intermodal operations.
• Compared to the all-highway alternative, the study shows that intermodal operations produce only about one fifth of the VMT that would be generated by trucking alternative.
• The study indicates that inadequate clearance and access links, lack of communication, fragmented industry structure, and failure to make needed investments in support infrastructure have tampered efficient port and terminal interchange.
• The current and potential benefits from intermodal freight operations have been quantified in a variety of ways. These benefits have significant implications for the overall efficiency and performance of the transportation system.
• Challenges to intermodal performance range from inadequate infrastructure and network access, to constrained terminal capacity and door-to-door service delivery problems. These impediments affect industry costs, service quality, and overall performance.
• An array of solutions focusing on infrastructure improvement, institutional and deregulatory streamlining, and technological innovations are proposed to improve the performance of the intermodal freight system

Investment and Financing Policies:

• Economic Analysis.

• A number of research studies by and for the Federal Highway Administration Office of Policy Development document the effects of public highway capital on logistics system and commercial sector economic performance.
• This paper considers the Nadiri and Mamuneas's 1998 study (see annotated bibliography No. 23 in this report), which examined the contributions of total highway capital and nonlocal highway capital to the output growth and productivity of 35 industry sectors comprising the U.S. economy.
• Nadiri and Mamuneas's econometric analysis provides empirical evidence of the positive impacts of public highway on private sector costs of production.
• Their research also estimates the effects of highway capital investment on the production sector's demand for labor, private capital formation, and materials.
• In addition, the analysis estimates the marginal commercial benefits of road system investments, calculates the net social rate of return on highway infrastructure spending, and identifies the contribution of highway capital and other economic factors to the productivity growth rate in the U.S. economy between 1950 and 1989.

Investment and Financing Policies:

• Economic Analysis.

• An investigation of the association between per capita income and the magnitude and quality of road infrastructure is carried out.
• An empirical approach is adopted. The selected variables on existing road networks are directly compared or correlated with a country's income.
• Cross-section analysis of data from 98 countries, and time series analysis of U.S. data since 1950 showed consistent and significant associations between economic development, in terms of per capita national product (GNP), and road infrastructure, in terms of per capita length of paved road network.
• The data show that the per capita stock of road infrastructure in high-income economies is dramatically greater in middle and low-income economies. For instance, the average density of paved roads (km/million inhabitants) varies from 170 in low-income economies to 1,660 in middle and 10,110 in high-income economies, the latter being 5,800 percent higher than the low-income group.
• Road condition also seems to be associated with economic development: the average density of paved roads in good condition (km/million inhabitant) varies from 40 in low income economies to 470 in middle and 8,550 in high income economies.
• The empirical information presented can be used as indicators of areas of weaknesses or strengths in a country's road infrastructure stock.

Investment and Financing Policies:

• Economic Analysis.

• The total costs of road travel and transport encompass more than governments' expenditures on roads.
• Some studies find that the tangible benefits of road travel and transport exceed, by trillions of dollars per year, even the highest estimates of social costs. The gross value of these benefits ranges from $6 to $10 trillion annually. The consumer's surpluses derived from travel and transportation are the largest components of the gross benefits.

Policy Implication of the study:

• The standard of living could be improved by using a higher proportion of highway user taxes for major highways.
• The intangible benefits of road travel and transportation are important to the American way of life, and may justify some use of general taxes to support travel and transport.
• Restrictions on road travel and transport could deprive Americans of huge net benefits.
• Special interest exclusions from highway user taxes contain large hidden costs.
• Energy and transportation policies established in the era of gasoline lines should be updated.

Investment and Financing Policies:

• Economic Analysis.

• The purpose of this study is to determine how much the economy of each state depends on out-of-state highways, i.e. national system of highways.
• Based on data from the 1993 Commodity Flow Survey, this study uses the percent of the state's products shipped out-of- state markets by truck to measure the state's economic benefit from a national highway system.

Study findings:

• Nationwide, 75.1 percent of the value of products are shipped by truck, while 24. 9 percent use other modes.
• One third of products by value are shipped by truck entirely within originating state.
• Almost 42 percent of the total value of products are shipped out-of-state by truck and thus depend on the highways of the other states.
• Some states are more dependent than the others on highway transportation to move their products.
• Arkansas is also the state most dependent on national highways, shipping 63 percent of its products by truck out of state.
• The core strategy for reauthorization of the Federal highway program should be to preserve and strengthen the national highway system, since the economic prosperity of the majority of states depends even more on out-of-state highways than on in-state highways.
• In economic terms the goal of federal highway funding should be to allocate resources in such a way as to maximize the national benefit from the highway system.

Investment and Financing Policies:

• Economic Analysis.

• The purpose of this study is to determine the importance of transportation to specific industry sectors. The study assesses and describes the economic structure, condition, and performance of the industries, including the typical production and distribution processes involved.
• Estimates of cost savings due to highway system improvements are obtained by interviewing 27 firms in six different industries.
• Cost savings were developed from three principal sources of such savings: reduced inventory costs; economies of scale in larger volumes of output; and reductions in regional warehouse operations.
• Econometric analysis are conducted to fit translog cost function equations for 226 four-digit industries. The changes in the costs due to each one billion dollars investment in highway infrastructure are computed.
• The rates of return of highway investment for the 226 industries are estimated. These rates are considerably lower than those that have been yielded by Cobb-Douglas production function studies.
• It appears more likely that larger payoffs will be realized from improved utilization of existing infrastructure through congestion pricing and introduction of IVHS technology, more so than from gross additions to the highway network.

Investment and Financing Policies:

• Economic Analysis.

• The purpose of this research project is to improve our understanding of the linkage between transportation investment and economic performance.
• The literature review section critically reviews currently available literature examining the linkage between infrastructure investment and economic performance. The authors conclude that infrastructure investments have modest positive effect on the nation's private economic activity. It is also concluded that the level of analysis is too general to help government decision-makers establish priorities for allocating scarce transportation resources.
• To improve the understanding of the linkage between transportation investment and economic activity the authors develop a desegregate data set. It includes information about different types of infrastructure, economic activity by industry, and national data by region.
• Several empirical models are employed to test the linkage between transportation investment and economic performance -- industry-specific production functions, a traditional public goods demand model and a neoclassical growth model.
• The results show that the link between transportation investment and private economic performance varies by transportation mode, by industry and by state. Demographic and economic trends also have important implications for transportation investments. Finally, this study demonstrates the value of additional information about the link between transportation investment and economic performance obtained from the more disaggregate approach.

Investment and Financing Policies:

• Federal and State Funding.

• The Federal highway program ins one of the nation's most important programs to improve public health and safety.
• Motor vehicle crashes cost American society over $159 billion each year. That is more than seven times what the federal government is investing in the highway improvement program.
• ARTBA's analysis of public highway investment and traffic fatality and injury rates over the past 40 years shows a two-for-one public health return on investment.
• According to the U.S. Department of Transportation's (DOT) 1997 report to Congress, a sustained annual investment of over $79 billion would be necessary to make all economically beneficial investments.
• To achieve significant reductions in the highway fatality and injury rates in the post-Interstate construction era, additional public attention and government financial resources must be focused on safety improvements, with a greater focus on two-lane roads and high-risk intersections in rural and suburban areas.
• A 20-year (1974-95) U.S. DOT study shows that relatively low-cost improvements made to the roadway and road environment can have safety and economic payoffs.
• For example, construction of medians between lanes for traffic separation has been shown to reduce fatal accidents on improved roadways by 73 percent. Realigning roadways can reduce fatal accidents by 66 percent, as does removing roadside obstacles. Replacing a dangerous bridge with a new one has bee shown to reduce fatal accidents by 86 percent.

Investment and Financing Policies:

• Federal and State Funding.

• This paper investigates the effects of infrastructure investment in the Netherlands on economic growth and employment both in the short and the medium term.
• In the paper are presented calculations of the contribution of the government investment to economic growth in the period 1974-94. In order to disentangle these effects the authors use a Macroeconomic Semi Equilibrium Model (MESEM) for the Dutch economy in which investment by the government affects both the demand side and the supply side of the economy. The way in which this investment is financed is also incorporated in the policy analysis.
• Public investment in Netherlands decreased significantly in the period 1970-84. This cannot be explained by a drop in demand for infrastructure, but rather was mostly dictated by budgetary consideration.
• The simulations done by MESEM show that the increase in economic growth in the Netherlands in the period 1984-94 compared to 1974-83 can be explained for a considerable part by the reverse in the downward trend of public investment.
• The authors argue that reshuffling government expenditures can best finance infrastructural improvement. A second option for financing public investment is to appeal to the capital market.
• The policy conclusion of this paper is that general shift in government spending priorities in the past has negatively affected the contributions of public investment level.