Evaluating the causal economic impacts of transport investments: evidence from the Madrid–Barcelona high speed rail corridor

ABSTRACT

This paper evaluates economic impacts arising from the introduction of high-speed rail (HSR) between Madrid and Barcelona. Using difference-in-differences estimation we estimate an average treatment effect for provinces with stops on the HSR line of 2.4% for economic output, 3.3% for numbers of firms, and 1.1% for labour productivity. We complement our DID results with a synthetic control analysis for Lleida and Tarragona, two provinces that we argue were assigned HSR stations largely due to their incidental location. We find that both the number of firms and labour productivity are substantially higher in these provinces than in their synthetic counterparts.

KEYWORDS:

• High-speed rail
• economic impacts
• causal inference

Disclosure statement

No potential conflict of interest was reported by the authors.