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Analysis of Impacts of Road Maintenance on Road Transport Demand and Macro Economy

November 29 - December 4, 2015 The 31 th Sino-Japanese Modern Engineering and Technology Symposium Taipei. Analysis of Impacts of Road Maintenance on Road Transport Demand and Macro Economy. Tetsuji SATO (Chiba Institute of Technology). Contents. 1. Background & Objective

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Analysis of Impacts of Road Maintenance on Road Transport Demand and Macro Economy

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  1. November 29 - December 4, 2015 The 31th Sino-Japanese Modern Engineering and Technology Symposium Taipei AnalysisofImpactsofRoadMaintenance onRoadTransportDemand andMacroEconomy Tetsuji SATO (ChibaInstituteofTechnology)

  2. Contents 1.Background &Objective 2. ConventionalStudies 3. The Model 4.Empirical Model for Japan 5. Simulation 6.Conclusion

  3. 1.Background &Objective ○ InJapan -Nationalpopulationhaspeakedin2008. -Taxrevenueforroaddevelopmentandmaintenance areexpectedtodecreaseinthenearfuture. -Discussiononschemeofroadusetaxhasgrown. Necessitytoindicate roadmaintenance ⇒ travelspeed&cost ⇔ demand,economy roadtaxrevenue ⇒ maintenancelevel -Developamodelwhichcananalyzetheseimpacts. -Conductsomeempiricalanalysis.

  4. <Trend of National Population in Japan >

  5. < Maintenance, management and renewal cost of infrastructure > (trillion yen) 20 15 10 5 0 -5 1965 70 75 80 85 90 95 2000 05 10 15 20 25 30 35 40 45 50 55 60 Source: White paper on Land, Infrastructure, Transport and Tourism in Japan, 2011

  6. 2.ConventionalStudies ○ Indirecteffectoftransportdevelopment ・CGE(Computable General Equilibrium) model -Yamauchi, etc.(1999) for expressways in Japan - CGEurope(2004) for transport in EU - Tsuchiya, etc.(2009) for high-speed rail in Taiwan - Sato (2013) for Chuo Shinkansen (MAGLEV) inJapan

  7. ・Econometricmodel -For the long-run road planinJapan GMM (1973), FORMATION(1998),EMERLIS(2003) - Yoshino, etc.(2002) for an urban expressway in Japan - Sato, etc.(2003) for two expressways in Japan - Sato, etc.(2013) for road network disruptions caused by the Great East Japan Earthquake -Sato (2015) for Hokkaido Shinkansen inJapan

  8. ○Indicatorsforroadsurfaceconditions ・IRI (International Roughness Index) (mm/m) dZ:The cumulative value of movement variations(mm) L :The transport distance(m) (The interval to valuate data)

  9. ・MCI (Maintenance and Control Index) C:crackpercentage(%) D:averagedegreeofrutting(mm) F:flatness(mm) 3.0 to 4.0 for ordinary roads 4.5 or below for expressways Maintenance and/or repair should be carried out.

  10. -T.Ishida,etal.(2004) <IRIandTravelSpeed> Speed(km/h) Small Truck Bus Car LargeTruck

  11. -TheMinistryofConstruction(1986) <MCIandTravelCost> Truck Car Cost(yen/100km) Cost(yen/100km) MCI MCI

  12. -K.Murayama,etal.(2005) <MCIandCumulativeTrafficVolume> MCI Cumulativetrafficvolumeoflargesizevehicles(millionvehicles/lane)

  13. 3.TheModel TransportBlock MacroEconomyBlock

  14. (1)TransportBlock ○Road Accessibility t:yeark:typeofvehicler,s:origin,destinationzone ACC:roadaccessibilityGT:generalizedtime Q:trafficvolume T:traveltimerequiredCOST:travelcost Toll:expresswaytollw:valeoftime RTime:changingrateoftraveltimecomparedwiththebasecase RCost:changingrateoftravelcostcomparedwiththebasecase

  15. ○Changerateintraveltimerequiredandtravelcost t:yeartB:basedyear Capacity:roadtransportcapacityTD:roadtransportdemand Speed:travelspeedMaintenance:roadmaintenancelevel Qtruck:trafficvolumeoflargevehicles

  16. ○Roadtransportdemand t:year TD:roadtransportdemand POP:populationGDP:grossdomesticproduct ACC:roadaccessibility

  17. ○Roadinvestment and vehicle related tax revenue t:yeark:type of vehicle IGR : real road investment TAXroad : vehicle related tax revenue TAXroadother : other finance for road investment TAXroad_k : vehicle related tax revenue for k kind of vehicle RTAXroad_k : vehicle related tax rate for k kind of vehicle

  18. (2)MacroEconomy Block

  19. ○Gross domestic Product (GDP) t:yeari:industry V : potential productivity GDE : gross domestic expenditure NW : the number of workers LHR : average working hours per person KP : private capital stock ROW : the rate of capital utilization ACC : road accessibility CP : private consumption expenditure IHP : private housing investment IP : private capital investment CG : public consumption expenditure IG : public capital investment E : export M : import J : inventory increase

  20. ○Number of workers, private capital stock and private capital investment t:yeari:industry NW : the number of workers GDP:grossdomesticproduct KP : private capital stock IP : private capital investment ROD : depreciation rate of capital stock ( )

  21. ○Private consumption expenditure and private housing investment t:year CP : private consumption expenditure POP : population YHD : household disposable income ACCCar : road accessibility by car IHP : private housing investment KHP : private housing stock RODH : depreciation rate of housing stock ( )

  22. ○Household disposable income, public investment, export and import t:year YHD : household disposable income TAXYH : income tax SSV : other current expenditures YH : household income GDP:grossdomesticproduct IG : public capital investment IGR : road investment IGOther : public capital investment except for road investment E : export M : import MW : world trade volume FD : final domestic demand RDY : exchange rate

  23. ○Tax revenue t:year TAXYH : income tax revenue TAXFirm : corporation tax revenue TAXFD : consumption tax revenue TAXOther : other tax revenue RTAXFirm : corporation tax rate RTAXFD : consumption tax rate YH : household income GDP : gross domestic product FD : final domestic demand

  24. 4.Empirical Model for Japan □Procedure of developing the empirical model Specialization of each function Collection of time-series data Verification of data stationarity Estimation of parameters for each function Model test (partial, total, final)

  25. □Data collection (1)TransportBlock -Roadtravelspeed Crosssectiondata of Road traffic census (1999) -Transportdemand/Vehiclerelatedtaxrevenue Time series data (1988-2002) (2)MacroEconomyBlock -Consumptiontaxrevenue Time series data(1989-2002) -Other Time series data(1981-2002)

  26. □Estimation of parameters for each function (1)TransportBlock -Roadtravelspeed Note: The lower figures in parentheses are t-values. ** indicates significant at 1% level.

  27. -Transportdemand Note: The lower figures in parentheses are t-values. ** indicates significant at 5% level and * indicates significant at 10% level. DUM0 : 1 (1990-2000), 0 (1988-1989, 2001-2002) for car DUM0 : 1 (1997-1998), 0 (1988-1996, 1999-2002) for truck DUM2 : 1 (1992-2000), 0 (1988-1991, 2001-2002) for truck Estimation period : 1988-2002

  28. -Vehiclerelatedtaxrevenue Note: The lower figures in parentheses are t-values. ** indicates significant at 1% level. DUM0 : 1 (1994-1996), 0 (1988-1993, 1997-2002) for car DUM0 : 1 (1990-1999), 0 (1988-1989, 2000-2002) for truck Estimation period : 1988-2002

  29. (2)MacroEconomyBlock -Production

  30. -Private capital investment

  31. -Private consumption expenditure

  32. □Final test (1)TransportBlock

  33. (2)MacroEconomyBlock

  34. 5.Simulation (1)Influence of prolonged implementation intervals for road maintenance and repair -Simulation cases (1)

  35. -Simulation results (1) ※Therateofchangefromcase0

  36. -Simulation cases (2)

  37. -Simulation results (2) ※Therateofchangefromcase0

  38. 6.Conclusion -Apracticalmodelwasdevelopedthatenablesthe influenceoftheroadmaintenanceandmanagement aswellasofvehicle-relatedtaxesonroadtransport demandandtheeconomyatthemacrolevel. -Prolongedimplementationintervalsforroadmaintenance andrepaircauseadecreaseinroadtransportdemandas wellasareductioninvehicle-relatedtaxrevenue,resulting inadropinGDP. -Thecombinationofareductioninvehicle-relatedtaxrates andtheprolongationofimplementationintervalsforroad maintenanceandrepairhaspossibilitytoincreaseroad transportdemandandpushupGDP.

  39. Thankyouforattention!

  40. References Ministry of Land, Infrastructure, Transport and Tourism of Japan (2011) White paper on Land, Infrastructure, Transport and Tourism in Japan, 2011. Yamauchi, H., Ueda, T., Kawai, T. (1999) Cost Benefit Analysis of Expressways with the General Equilibrium Model, Expressways and Automobiles, Vol. 42, No. 5, 22-30. (in Japanese) European Commission (2004) Modeling the Socio-economic and Spatial Impacts of EU Transport Policy, IASON (Integrated Appraisal of Spatial economic and Network effects of transport investments and policies), Deliverable 6. Tsuchiya, K., Hayashiyama, Y., Ueda, T. (2009) Estimation of Economic Benefits of Taiwan High Speed Rail by SCGE Model, Proceedings of Infrastructure Planning (CD-Rom), JSCE, Vol.40, 320. (in Japanese) Sato, T. (2013) Measuring the Impact of the Development of the Chuo Shinkansen Using a Quasi-Dynamic SCGE Model that considers the Population Movement, Journal of the Eastern Asia Society for Transportation Studies, EASTS, Vol.10, pp.350-362.

  41. Morinaga, E. (1993) Economic Effect of the 11th Road Improvement and Management Program, Express Highway Research , Express Highway Research Foundation of Japan, No.81, pp.28-35. (in Japanese) Kunihisa, S. (1997) Econometric Evaluation Model for New Five-year Road Improvement Program, Road and Transportation Economics & Practice, Express Highway Research , Express Highway Research Foundation of Japan, No.65, pp.87-98. (in Japanese) Sato, T., Miyakawa, M. (2004) The Macro Econometric Model for evaluating the Priority Plan of Transport Infrastructure Development in Japan, Selected Proceedings of 10th World Conference on Transport Research (CD-Rom), 415. Yoshino, N., Ueda, T., Sato, T. (2002) Evaluation of Metropolitan Expressway Central Ring Road with Regional Econometrics, SHIN TOSHI , City Planning Association of Japan, Vol. 56, No.2, pp.21-29. Sato, T., Yonekawa, M. (2003) Evaluation of Transport Investment focusing on Interregional and Intergenerational Equity, Journal of the Eastern Asia Society for Transportation Studies, EASTS, Vol.5, pp.3054-3069.

  42. Sato, T., Suzuki, K. (2013) Impact of Transportation Network Disruptions caused by the Great East Japan Earthquake on Distribution of Goods and Regional Economy, Journal of JSCE, JSCE, Vol.1, pp.507-515. Sato, T. (2015) Evaluation Method of Regional Economic Impact of High-speed Railway Development Considering Effects on Tourism Demand, Proceedings of the Eastern Asia Society for Transportation Studies, EASTS, Vol.11. Ishida, T., Takemoto, H., Shirakawa, T. (2004) Impact of Pavement Roughness on Riding Comfort and Sense of Safety Evaluated Using A Driving Simulator, Journal of Pavement Engineering, JSCE, Vol.9. (in Japanese) Construction Ministry's Institute of Technology (1986) A Comprehensive Study on Control Level and Management and Repair method of Pavement, Proceedings of Construction Ministry's Technical Seminar, No.40. (in Japanese) Maruyama, K., Takemoto, H. (2005) Economic Assessment and Use Policies of Modified Asphalt Pavement, Journal of Pavement Engineering, JSCE, Vol.10. (in Japanese)

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