Transportation speed matters

High skilled workers gain from face to face interactions. If the skilled can move at higher speeds, then knowledge diffusion and idea spillovers are likely to reach greater distances. This paper uses the construction of China’s high speed rail (HSR) network as a natural experiment to test this claim. HSR connects major cities, that feature the nation’s best universities, to secondary cities. Since bullet trains reduce cross-city commute times, they reduce the cost of face-to-face interactions between skilled workers who work in different cities. Using a data base listing research paper publication and citations, we document a complementarity effect between knowledge production and the transportation network. Co-authors’ productivity rises and more new co-author pairs emerge when secondary cities are connected by bullet train to China’s major cities.

That is from Xiaofang Dong, Siqi Zheng, and Matthew E. Kahn.  Of course, supersonic air travel should be next…

Comments

"supersonic air travel should be next…"

Or maybe just high speed rail between LA and the Bay Area?

In reality, I tend to side with critics of the project, due to its extremely high cost (and this is even before we discover that it will cost twice as much as projected). OTOH, though the costs are astronomical the benefits will be considerable.

Paying workers to build assets that will be productive for multiple centuries costs too much and kills jobs.

The only way to create jobs is to slash labor costs and business profit taxes to zero so the 100% tax free profits creates wealth which increases consumer spending on rapid delivery of imports from China.

Railroads built almost two centuries ago are still critical to the US economy. Returns on those investments paid for improvements increase productivvity, but few railroads lines have been built in the past century.

And if railroads are no longer needed, then why isn't South America, Africa, Asia not controlled by the British and thus lacking railroads, not as connected as the US and Canada, western Europe and Britain, India, Japan, and now China.

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Interesting thing I heard was that high speed rail is needed to bring down real estate prices in Bay area since it opens up Central Valley to commuters into Central Valley. So even if not completed may still have benefits as a "super Metro North".

"...into Silicon Valley" oops.

I'm guessing that the people who say things like that own property in the Central Valley that they'd like to sell you.

OTOH, though the costs are astronomical the benefits will be considerable.

The costs will certainly be astronomical, but why 'considerable benefits'? After all, the existing air links between LA and SF are faster and cheaper (even with massive subsidies for the train).

Status signaling. Airports are jammed with the vacationing masses. Bullet trains, at least at first, will be a perk indicating that one is on Important Business.

Except that the bullet train (assuming it's ever finished, which I doubt) won't go all the way to San Francisco -- just to San Jose. Those on Important Business will still have to switch to an ordinary, grubby commuter train to make it all the way into SF.

That's mostly true by plane though too. San Jose is where it's all happening these days, anyway.

"Airports are jammed with the vacationing masses."

Real frequent fliers slip into the airline lounges, then jump on the plane into business/first class.

BTW I call the SouthWest flights between LA/SD/SJ/SF the "California High Speed Rail" because there is one leaving every hour...

But I thought skilled workers moved at the speed of light these days.

For some definition of skilled worker that a German manufacturer would likely find laughable, that is.

Yes that famed German sense of humor....

Everyone who posts on this blog, whether it is msgkings or prior_approval, or any of you are all pedantic blithering idiots.

Wasn't there an article a while back tying the decline of some American cities to the fact that their airports were harder to get to from overseas?

It sounds like some interesting studies could be done there.

Of course it might challenge the idea that deregulation produces best outcome for all. It might produce the surprise answer that subsidized flights to medium-sized towns produce more widely distributed wealth.

Like St. Louis, Kansas City, Des Moines, Cincinnati, Louisville..

I originally was, and probably net-net still am, a fan of airline deregulation. Flights are less fun, but everything is more efficient. The efficiency starts as economic, but turns out to be environmental as well. Half-empty flights do the environment no good.

That said, I might be prepared to accept some inefficiency for the sake of greater equality. If someone can show some math on that.

"Skilled worker" in this case probably means orthographic conceptualist, not object manipulator. The ephemeral thoughts of the orthographic conceptualists can be delivered by electronic means, no need for travel of any kind. The lowly object manipulators, who must actually touch items with their hands, are required to be physically on the scene of productive activity. Ever notice how when an object manipulator calls in sick or goes on vacation someone must be found to temporarily take his place? On the other hand, when the boss flies to Vienna for a conference, no replacement is necessary.

By your same logic then why would the boss fly to Vienna for a conference if his “ephemeral thoughts can be transferred by electronic means?”

"By your same logic then why would the boss fly to Vienna..."

Maybe, because Vienna is a really nice city to visit and he doesn't have to pay for it.

A true DC to Boston HSR seems like a no brainer yet here we are...

In the famous paraphrasing of Max Planck- science advances funeral by funeral. To overturn old ideas it is often necessary for new ideas to have an incubation period among a relatively isolated group of highly talented people. If all the universities of the world were to relocate to Amsterdam the initial effect might be positive but it seems probable that a kind of group-think consensus would form up around old ideas and stagnate. (Is that finally happening in Silicon Valley?) The balance between concentration and dispersal of talent is complex involving many factors on a case by case basis. Many have tried to recreate the Silicon Valley success in some form or another, no one quite succeeds as well. In cultures where there is more conformity, where the nail that stands out gets hammered down, the tendencies toward group-think stagnation is likely to be greater which would suggest advising a balance favoring dispersal- small clumps of isolated groups, might work better for scientific advancement. In the short run I'd expect an increase in technical expertise as China finishes playing catch-up in technology (if it hasn't already) and distributes technical knowledge more thoroughly throughout it's regions, but it wouldn't surprise me terribly if the long term effect of high-speed rail in China is negative for science production, and then for innovation and patents.

One reason, one very big reason, Americans resist modern transportation infrastructure is because America is so geographically large and diverse. People in Wisconsin don't want to pay for transportation infrastructure in California. Of course, that ignores the way most business is conducted, and the way most people travel for business, which is regional. For example, people located in the Southeast region travel for business primarily within the region. Thus, I was impressed by Richard Florida's ideas for regional development (he called them "super regions"). Alas, few others were. China is geographically large and diverse, but its government is highly centralized; hence, the centralized government has a broader perspective, not only with respect to China, but the entire East. While China pursues its One Belt, One Road initiative to connect China to the entire region, America talks about building walls between America and its neighbors. And metaphorically, America has already built walls between regions within America.

I think you are right to latch onto the idea of regional- or at least clustered groups when it comes to further promotion and payment for public infrastructure (or public goods in general). The Twin Cities has had a regional governing body- The Metropolitan Council (https://metrocouncil.org/)- overseeing primarily public transportation and sewer/water for the last forty odd years or so. Although still controversial as council members are appointed by the governor instead of elected, its work has been deemed for the most part a success. After all, Minneapolis Metropolitan area housing prices are considerably more reasonable than most all cities which offer comparable employment opportunities, schools, commute times, parks/trails, professional sports, arts and cultural and all else that features into the quality of life indicators. This must speak to some efficiencies.
I suggest we promote a term used in political discourse that groups folks by their interests and in doing so separates them from others into cleavages. As you say Wisconsin is not likely to support a mega price tag for transit in California when it surely has roads in rural areas that are in disrepair and over used commute corridors running north out of Chicago and would love better connections to all the commercial centers in the upper Midwest. This nesting of interest from small community to larger metropolis to entire sub-region is a repeated pattern that plays out through the entire country.
By identifying cleavages and framing them as such, the peoplehood is provided with a better understanding of the benefits each could attain. By bringing the decision down to smaller geographies of economic and social behavior, self-identified groups are better prepared to weigh the tradeoffs. And when the public needs to reach into each and every pocketbook for payment, I suspect there will be less likelihood for resistance and greater propensity for support.

"People in Wisconsin don't want to pay for transportation infrastructure in California."

Of note, regarding total federal personal income taxes, in 2017 Wisconsin paid $61 billion, California paid $705 billion.

Cowen alludes to this from time to time, but our form of government may not work very well today, not when it takes an enormous amount of investment and coordination to compete effectively in the global economy. Most readers of this blog believe China and the Chinese are not very smart and cannot compete against us if there's a level playing field. Level playing field?

" America has already built walls between regions within America."

Yes, because not building High Speed trains is just like building walls.

My new home is in Nashville, TN and traffic sucks. The defeated transit plan was far from perfect, but it was a start. Asking only drivers to pay for transit continues the pattern of selfishness so rampant in today's politics. Everyone in the community benefits from better air quality and increased opportunity near transit stations.

Unfortunately, outside forces felt the need to step in and voice their opinion. Do you live here? If not, y'all need to go home.

https://www.tennessean.com/story/opinion/2018/04/30/opinion-fairer-fix-nashville-congestion-than-light-rail/567002002/

The transit plan was awful and it's laughable to say it was defeated by "outside" forces. It was a silly idea and the voters said No.

Overwhelmingly No, for the record.

64% No, 36% Yes.

That's pretty much a landslide against the plan.

How can anyone plausibly claim (or even imply) that a short-term dynamic will become a long-term cultural characteristic (and so should be evaluated as such)??

"Using a data base listing research paper publication and citations, we document a complementarity effect between knowledge production and the transportation network."

Translation: we found a (most likely) spurious correlation, but if we come up with a semi-plausible BS causal mechanism, we can get a paper published. You can regress a rising trend such as "new co-author pairs emerge" to any other rising trend and explain a fair bit of the variance. What is the actual proposed mechanism at work here? Scientists with suitcases full of academic papers refusing to take the bus to secondary Chinese cities, but happily taking the train? Is this how the authors claim knowledge propagates in China?

"explain a fair bit of the variance": that's OK here, but I loathe it when the statistical use of "explain" is repeated in the newspapers, where it will inevitably be read as having the layman's meaning of "explain". Essentially, in the newspaper it's lying. Though you might say "Newspapers: what do you expect?"

I wonder about congestion making some places less connected than they once were. I was involved in a joint UCLA-Caltech project involving a half dozen researchers from each school. We liked to time the occasional meetings early in the afternoon so that whoever was visiting the other campus could leave early enough to not spend extra hours returning home, and we sometimes failed at that. It left me wondering: In which decade were Pasadena and West LA the most connected? There would have been some initial period, perhaps up through the 1960s, when transportation within the metropolitan area kept getting better and better. Then there was a later period in which fixed locations twenty miles apart became less easily accessible to one another.

I wonder what the cost was of stopping the Cambridge-Oxford railway service. Somebody should write a paper about it.

and why is the construction of China’s high speed rail considered to be a natural experiment ?

I think supersonic flights along with hydrogen cars in Dead End futures. They are technically interesting without being truly efficient in any dimension (total systems impact considered).

Jerry Brown Was Right !!

If transportation speed is what matters, there's always the option of a catapult.

One issue is that a good portion of travel time is last-mile as opposed to just between metro centers. During rush hour, it takes as long to fly between LA and San Jose as it does to go three exits down the 101 in Silicon Valley.

High speed trains between Shanghai and Hangzhou means that me and my team, the China office of a US brand selling via ecommerce in China, can move between my HQ and Alibaba’s HQ and back for a morning meeting and be back by mid-afternoon. This means we do most of our important communication face to face, 2-3 times per month. This face-to-face time is invaluable (well, I could put a value on it if I tried) and is possible because of high-speed transportation.

Technology improves everyday. I am sure the will be very fast trains in the future.

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