The Impact of Public Transport Investment on Economic Development: A Study of London

Working Title

1.Working Title 

The impact of public transport investment on the economic development of an area 

2.Aim and objectives

I will primarily want to look at the impacts recent transport projects are having on London and look into the impacts a project like Crossrail is having on development and how the government goes about planning where Crossrail 2 will go. 

My aims from carrying out the research is to find out more about how governments go about planning a new transport route particularly focusing on railway infrastructure. I also want to know more about the consequences of this and how they impact the population. 

I want to investigate whether this government investment is having any influence on private sector investment. Is there a correlation here whereby firms want to invest in real estate located in close proximity to transport connections? By what magnitude will being in closer proximity to transport connections have on their wider business objectives. 

This is a topic where I can take several approaches. However due to the time constraints I will only be able to look at one factor and how it has been influenced by transport investment. However, from analysing one specific factor (e.g. number of construction planning applications in areas close to where new Crossrail stations are built), I can then consider what wider economic consequences this can have. 

3.Purpose/rationale of the study

I Want to explore this area as London is growing fast and the transport is at capacity. There are also several schemes in the pipework (both small and large scale) across London. This is an issue that will impact other cities too and is difficult to solve. It is a tough decision on where to direct limited government money and how this will have the biggest multiplier effect on the economy. I use transport to commute to and from university and new transport lines will aid easier flow of people and cause development along the way. Given the large upfront costs of constructing transport infrastructure projects, it is an area that should be investigated in more detail. 

 

4.Theoretical motivation and research question

After doing initial research, I can see that it is an area that has not been tackled in great detail. There are lots of approaches I can take with regard to this and impacts I can analyse. It is under-researched, but more knowledge of the area can be beneficial to the public sector helping them plan on where to invest and also the private sector on how they can benefit from planning their real estate accordingly.  

Aim and Objectives

In terms of measuring the impact on the development I have read recent papers on how new transport projects (primarily in Asia) have triggered factories to set up there and also read a paper linking infrastructure investment and entrepreneurship. There have been fewer studies in Europe and think a similar research project using London as its focus will yield different results to the studies carried out in Asia. It will be interesting to see what these differences are and can be a point of discussion. I have also read case studies which have been a focus of qualitative research on the wider economic benefits of a transport project. 

One thing that has not been measured as much is its impact on private sector investment. In order to investigate this, a closely related factor to this I can test is identifying the number of construction planning applications made in areas close to where new Crossrail stations are built. This data should be available from local authorities but may be difficult to piece together. I will perhaps categorise what types of buildings these planning applications are for e.g. residential vs office vs retail developments. 

I am also considering looking at housing and commercial prices and how they have been impacted since schemes have been announced (speculative private investment caused by public sector investment) This quantitative data should be available to carry out an analysis on this from the ONS or housing index. 

Hypothesis 1: The construction of a new station will cause house prices to rise within 1km of the station. 

Hypothesis 2: The construction of a new station will cause commercial prices to rise within 1km of the station. 

Hypothesis 3: The construction of a new station will trigger a rise in planning applications to construct new buildings/extend existing buildings within 1km of the station. 

5.Methodology

The above ideas have directed me towards using quantitative research methods for the focus of my study. I have identified an independent variable (A new transport development) and I wish to examine the impact this has on the number of planning applications (the dependent variable) 

I will undertake a causality study and hypothesise a series of statements in the form of: 
If X occurs what is the impact on Y? 

It will measure the change that has occurred as a result of a new transport investment taking place. 

From the above, I can discuss any empirical associations between X and Y and make a conclusion based on finding an association between the independent variable and the dependent variable.

As mentioned previously, much of the data I will collect to test my hypotheses will be extracted from large public databases which I should be able to gain access to. E.g. a housing price index.

The data collection can be supported by carrying out primary research on specific things such as the zoning of retail/commercial space near stations and if this has changed. This will enable to me to gain a better understanding of the locations I am examining. 

I will need to be careful when testing relationships. Correlation does not imply causality. Two unrelated events may appear to be related. 

Another potential issue with testing my hypothesis is that it may be difficult to determine what the cause is and what the effect is. Perhaps the high economic development rates have attracted the government to plan a new transport line to cater for the higher demand. 

6.Contribution

After carrying out reading on my topic, I have noticed two things: 
a)Many of the studies in this field have used developing countries in Asia as their focus
b)Links have been established between transport investment and economic development but there are few studies on how it is impacting private sector investment or planning applications 

The research I have carried out will add to the existing body of knowledge regarding the topic. More research looking into different transport projects and what has come about as a result of them will aid the government in choosing how to go about planning transport projects and maximise utility. As the government is still considering whether to go ahead with large projects such as HS2 and Crossrail 2, having more information of how transport infrastructure projects have triggered economic development in the UK will assist them in finalising the route and maximising the multiplier effect as a result of these projects being constructed.