National Income And Employment Impacts Of Railroad Branch Line Abandonment: Conceptualization And Measurement

This study seeks to contribute to the development of procedures which provide useful information to decision-makers and affected people regarding the national income and employment impacts of railroad branch line abandonment. There are three major parts to this paper. The first part probes the underlying assumptions of public investment analysis. It is noted that non-Pareto optimal welfare changes occur whether or not abandonment takes place. The decision of whether or not to subsidize branch lines is based on the decision-makers' evaluation of certain important consequences, expressed in terms of criterion variables. It is argued that analyses should provide information regarding criterion variables to which decision-makers can assign values in the ultimate abandonment decision. The second part presents a conceptual approach within which two criterion variables -national income and employment impacts-can be isolated. National income impacts are composed of changes in the amount of resources devoted to transport cost and changes in output. Employment impacts are examined in the dimensions of occupational groups and geographical areas. The last part applies the conceptual approach by estimating and displaying national income and employment impacts for four connecting branch lines in Michigan. Finally, data limitations and problems in empirical estimations are brought to light in the summary and conclusions.