It’s been hard to justify high-speed rail (HSR) projects in terms of
conventional cost-benefit analysis. But, it may be time to rethink–and broaden–the way we think of the benefits of HSR. HSR’s benefits
are usually thought of in terms of lowering transport costs by reducing
problems like gridlock, pollution, and travel time. But the real
benefit of HSR may turn on its ability to expand economic growth,
according to a new analysis by my colleagues at the Martin Prosperity Institute.
There are three main mechanisms through which high-speed rail can help
expand the economy, according to the MPI study. First, HSR expands the
labor pool available to firms, bringing talented workers from nearby
centers within commuting distance and thus expanding the quantity and
quality of available employees. Second, HSR makes more jobs available
to workers without making them have to relocate and move to a new home.
Third, HSR extends the benefits of other expensive,
productivity-enhancing infrastructure such as airports across broad
regions. International airports, major research universities, and
reference libraries are all more financially viable and internationally
competitive when they serve a larger population. High-speed rail allows
them to build the scale they need to achieve world-class excellence and
also spreads their high costs across a wider population.
The MPI report is here.
Photo credit: Chuck Kennedy/Wikimedia Commons
