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Toshimori Otazawa and Yuki Ohira

Interactions between individual agents are fundamental to our society. Local interactions generate external effects such as knowledge spillovers and synergies. From the spatial aspect, face-to-face contacts are regarded as a crucial factor of the existence and the structures of cities. Most of this research, however, focuses on the influence of physical proximity and pays less attention to that of social proximity. As sociologists claim, social distance also plays an important role in determining both quantity and quality of interaction activities. In this chapter, the authors propose a social interaction model in which both intensity of social linkage and synergy effects of face-to-face contacts are incorporated. Furthermore, the authors introduce evolutional dynamics of agents’ locational choices and examine the long-run outcome of interdependence between social interactions and urban spatial structure.

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Shunsuke Segi and Kiyoshi Kobayashi

In this chapter, the authors consider a road network where a highway and a local road run in parallel and theoretically analyse the second best pricing of the highway toll. They consider how the deterioration of road structures differs between trucks and cars and how the load-bearing capacity of road structures differs between the highway and the local road. Discriminatory toll pricing of two vehicle types results in more trucks being led to the highway from the local road and the total maintenance cost of the entire road network is reduced compared to the case when the toll for cars is not raised. Cutting the toll for trucks and raising the toll for cars can maintain the toll revenue of the operator and thus is effective when the operator needs to cover its operational cost from the toll revenue.

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William P. Anderson, Hanna Maoh and Charles Burke

This chapter presents estimates of total employment impacts at both the regional and national levels for the Herb Gray Parkway construction project in Windsor, Ontario, Canada. Because this study is based on detailed quarterly employment and purchasing data provided by the contractor, it generates more specific and accurate estimates than conventional input-output and other multiplier methods. The ex post estimates are contrasted with higher ex ante estimates and reasons for the gap between the two are explained. This yields insight into why anticipated employment impacts may be over-estimated and provides guidelines for more realistic impact projections. The chapter also addresses the question of what long-term regional structural transformations may arise from capital formation, skills development, technology transfer and other processes.

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Hans Westlund

This chapter discusses the role of the railway in the regional industrialization of Scandinavia. It is focused on two questions: Did the emerging industry spur building of railways or did the building of railways promote the industrial development? Did the causes and effects change direction over time? Moreover, the related issue of the relationship between industry’s regional concentration and dispersion, on the one hand, and national economic growth, on the other, is discussed with examples from Sweden and Norway.

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Makoto Okumura and Hiromichi Yamaguchi

The service level of inter-regional transportation on all but the busiest arteries in Japan will decrease due to the declining population. Currently, only business and sightseeing travel are considered as major drivers of inter-regional traffic flow for the planning of transportation network improvements. But private travel for visiting remote family is also essential. The social importance of this type of travel will increase with the future aging population, when many people who had made inter-regional migration will need to take care of their elderly parents living in their region of birth. In this chapter, this type of inter-regional travel is analysed using the zero-inflated Poisson models. The authors conclude that both the birthplace distribution and the service level of transportation affect the frequency of these trips. In other words, travel to visit elderly parents acts as an integrator of historical inter-regional migrations.

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Gautam Ray

Departing from conventional approaches in modeling transportation, this chapter captures transportation’s direct utility and external effects, and develops general equilibrium models of transportation for aggregate economies. The basic model determines the optimal level of transport infrastructure capital and its tax-price for an economy exhibiting constant returns to scale technology. This model framework is extended to two models for economies exhibiting increasing returns to scale. While the planning equilibria are optimal in these models as in the basic model, the decentralized market equilibria are sub-optimal. Some results of the basic model framework relevant to transportation planning and policy are discussed.

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Thomas Laitila, Marie Lundgren and Michael Olsson

This chapter studies individual commuting behaviour by considering the spatial variation of the economic milieu. The model employed relates the relative commuting probabilities to the relative labour demand and relative worker competition. The authors work with aggregated data separated into categories defined by gender and education level. The dependent variables in the model are heteroskedastic and dependent. Moreover, the variables are logarithmic ratios, which is an additional statistical challenge. In order to estimate the model in this situation, the authors use Feasible generalized least squares. The model is estimated using the whole data set, but also for the categories. Overall, the estimated model fits the data well. An individual loses utility when commuting from the home municipality. The loss is greater if the commute is to another region. The individual utility is positively related to labour demand and negatively related to worker competition. This is the case for all categories, with one minor exception.

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Kakuya Matsushima and William P. Anderson

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Åke E. Andersson and Börje Johansson

This chapter addresses the role of knowledge in regional development. Knowledge is a multidimensional concept that includes private knowledge embodied in an individual’s brain (human capital); technical advances embodied in computers, machinery and other production equipment; knowledge embodied in production recipes, patenting documents or computer software; and public knowledge in scientific journals. For the individual firm, innovation is driven by the conjunction of its knowledge arising from internal research and external knowledge. The dynamic interactions of these different representations of knowledge is a complicated process. The chapter presents a conceptual framework for identifying interaction processes in the global system of knowledge creation and exploitation, as well as formal models of economic theory, to draw conclusions about characteristics of the knowledge economy including the emergence of some places as knowledge centres and the decline of other research-poor peripheral regions.

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Kakuya Matsushima and Kiyoshi Kobayashi

The mechanism of residential sorting and its effect on the economy are analysed by building a theoretical model that explicitly treats the emotional part of utility for choosing a specific travel mode. The authors also verify the residential sorting effects by using person trip survey data in Japan. The chapter concludes with a discussion of the model’s findings for policy planning. In particular, the authors found implementing soft transport policy measures that affect individuals’ preference for travel mode have to be considered as one of the tools of policy measures in city planning.