Economic Effects of Public Investment

1. Front Matter

   Pages i-xxiii

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2. Definition of Economic Effects, Necessity of Measurement, Prototype Model, and Externalities

   • Hirotada Kohno

   Pages 1-22

3. Time-Saved Evaluation and Social Discount Rate

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   Pages 23-39

4. Perfect Transfer Theory of Indirect Economic Effects Formation: Based on the Generation Base vs. Incidence Base

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   Pages 41-55

5. Independent Existence Theory Forming Indirect Effects and Its Three Examples: Congestion Easing, Scale Enlargement of Factory·Warehouse, and Marshallian External Economies

   • Hirotada Kohno

   Pages 57-64

6. Formation Process of Marshallian External Economies: Number 3—Technological and Marketable Propagation/Diffusion of the “Technological External Economies”

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   Pages 65-78

7. Social Costs and the Measurement

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   Pages 79-117

8. Measurement of Evaluation Rate of Public Pollution (Noise)

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   Pages 119-154

9. Criteria of Benefits Valuation—Remained vs. Transferred, and Generation Base vs. Incidence Base

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   Pages 155-160

10. Verification of Independent Existence Theory Depended on the Market Equilibrium Model: Based on the Great Discrepancy of the Benefits in Generation Base vs. the Benefits in Incidence Base

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    Pages 161-233

11. Generalization of Technological Propagation/Diffusion Externalities Based on the General Equilibrium Model of Formation Process of Marshallian External Economies: Number 4

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    Pages 235-256

12. Closing Paragraphs—On the Occasion of Closing This Volume: Economic Effects Theory and Measurement

    • Hirotada Kohno

    Pages 257-277

13. Back Matter

    Pages 279-297

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This book shows the necessity of measuring the incidence-basis indirect economic effects of public investments. The essential argument can be traced back to H. Mohring versus J. Tinbergen, the conclusions of one contradicting those of the other. Their arguments are called, respectively, “transfer” and “existing theory” of the indirect economic effect of public investments such as highways.

The author has first defined the categories of “generation-basis” and “incidence-basis” economic effects in addition to the categories of direct and indirect economic effects, and has shown that it is essential to measure the incidence-basis indirect economic effects for decision making about public investments. The second major point is that, in this sense, the measurement must rely on the general and dynamic spatial modeling simulation approach. The third essential point is that Tinbergen is correct as far as we have to cope with a real setting in which the Marshallian type of external economies exists.

Another characteristic is that the monetary (pecuniary) external economies are dealt with systematically, for the superiority of public investment criteria depends greatly on whether they are taken hold of or not. This book lays emphasis on the process toward the equilibrium, not the equilibrium itself.

• Direct Economic Effects
• Independent Existence Theory
• Indirect Economic Effects
• Marshallian External Economies
• Propagation/Diffusion
• Technological External Economies

• Professor Emeritus University of Tsukuba, Tsukuba, Japan

  Hirotada Kohno

Emeritus Professor, The University of Tsukuba, Japan

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