Congested Development? Examining the Effect of Traffic Speeds on the Location of New Business Establishments in Los Angeles (original) (raw)

Transportation Research Board 95th Annual MeetingTransportation Research Board, 2016

Abstract

It is widely assumed that traffic congestion is a significant burden on the economies of metropolitan regions. In this article, the authors suggest that the relationship between traffic congestion, as defined by the speed of travel across different parts of metropolitan regions, and economic activity is considerably more subtle and complex than is widely assumed. This study analyses the location of new business establishments (start-ups) in metropolitan Los Angeles for two industries, the entertainment and information technology (IT) industries, in 2009. There is a broad literature devoted to understanding why new business establishments locate where they do within regional economies. This research generally finds that firms of “basic” or tradable industries tend to exhibit a high degree of spatial clustering, or agglomeration. Since the performance of certain industries determines the success of regional economies, and co-location –or reduced impedance in the parlance of transportation planners –contributes to within sector productivity, the authors’ work draws on both transportation economics and economic geography to determine how transportation networks and delays on them affect the ability of industries to co-locate within regional economies. The authors’ examination of these two basic industries suggests that while region-wide claims about the effect of traffic congestion on economic activity may have merit in the aggregate, it is more likely the case that accessibility is distinctively different among industries.

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