Assessing the Value of Market Access from Belt and Road Projects

This paper describes a parsimonious approach to the economic analysis of transportation investments. In a gravity model of trade, project benefits may be summarized by a money metric for the change in market access experienced by all cities due to the investment. This metric is equivalent to the change in the value of all payments to urban land—the fixed factor of production.

Using this model and an original geographic information system data set of Belt and Road Initiative projects in Eurasia, the paper predicts additional income paid to owners of urban land, for each project and city.