Institute of Urban and Regional Development (IURD) TRANSIT & CITIES CONFERENCE UC Berkeley March 20-21, 2014 Plenary Session 4: The Economics of Sustainable Transit

Jin Murakami [email protected] March 21, 2014 @ Berkeley CA City University of

Airport Access Transit & Economic Benefits - Findings from Asia - Mega Investment in Airport Access Lines across the World

BART SFO Extension, 2003 Airport Line, 2015

Tokyo Narita Sky Access, 2010 HK Airport Core Program, 1998

Intercity Travel Market & Intracity Last-Mile Cost Hong Kong’s Airport Express Line (1998) Intercity Travel Cost + Last-Mile Access Cost *Generalized by the finance & business service sector’s hourly GDP per worker in Hong Kong, 2012 6,000 5.1% 5,000 11.8% 12.9% 4,000

3,000 10.3%

Cost HK$ 2,000

1,000

0 HSR Air HSR Air HK - Beijing HK - Wuhan 1,970 km 910 km (Mid-Haul) (Short-Haul)

Ground Transportation Access Market Share of Airport Express Line, 2012 Insufficient User Benefit? 35,000 21.8% passengers per day (Gold Standard???) External Economic Benefit (Justification for Mega Investment) Airport Express Other (Bus, Taxi etc.) Sources: Jin Murakami with Weimin Lin (2013); MTR Corporation (2013) Does Airport Access Transit Increase Economic Productivity? 90Citieswiththe100BusiestAirports DeterminantsofGMPperCapita2012(LogͲLog) N=90WorldBusiestAirportCities :OLSRsquared=.44 :2SLSRsquared=.44 Instrumented:“AccessTimebyTransit”

Key Facts:

Rail Access: 57 of 90 airport cities Accesstime

Ave. Population: 8.9 million Elasticity bytransit Ave. Access Time: 35.3 minutes Ave. Generalized Access Cost: $16.1 Ͳ0.27***,Ͳ0.32*** Ave. GMP per Capita: $41,095 TwoͲWayCausality: + AirportAccess City’sEconomic Investment Productivity + Source: Jin Murakami with Yurika Matsui & Hironori Kato (2014) The University of Tokyo

Airport Access & Worker Productivity within Tokyo DeterminantsofValueAddedperWorker,267municipalitieswithinTokyo,2012 GeographicallyWeightedRegression (GWR): :OLS R2=0.53 CoefficientsofRailAccessTime :2SLS R2=0.53 Instrumented: Railaccesstime

Railaccess

Elasticity time

Ͳ0.29***,Ͳ0.38***

TwoͲWayCausality&SpatialEffect: Attract Attract Economy Demand Finance firms Finance firms + Agglomeration + + Agglomeration +

AirportAccess + Worker’s AirportAccess Worker’s Investment Productivity Investment + Productivity Source: Jin Murakami with Yurika Matsui & Hironori Kato (2014) The University of Tokyo Scenario Test: Airport Access for Tokyo’s Global Competitiveness? New Investment Proposal (2013) Scenario 9 The(foreign)financesector’sshare Tokyo Station increasesinthe10CBDwardsby12.5%. 9 AccesstraveltimetoHaneda Airportis reducedby10minutes. 9 Thereisnolocationalredistributionof activitieswithinthemetropolitanarea. Impact on GMP per Capita Ranking among the 90 Airport Cities Haneda Airport st 15.2 USD151,400 1 15.0 USD148,000 14.8

14.6

14.4

14.2 st Tokyo 41th Tokyo 14.0 44 (3Rankup) Present NewInvestment (Present) Addedvalueperworkerinthe10CBDwards

Debatable & Missing Points

‰ Waiting,baggagehandling,anddelayingcostsatairportsare muchgreaterthanlastͲmileaccess/egresscosts?ͲͲ Airlinevs. HSR; ‰ Withlowridership,reductionintrafficcongestion,carparking costs,andemissionsaroundairportscouldbesufficienttojustify suchlargepublicspendinginairportaccesstransit?ͲͲ environmentaloutcomes; ‰ NonͲbusinesspurposetravelersandlocalsmallbusinessowners gainexternaleconomicbenefits?ͲͲ impactontourism; ‰ Airportaccesstransitenhancesinternationalbusiness competitivenessattheexpenseoflocalcommunitylivabilityin redistributiveways?ͲͲ lackofplacemakingandsocialequity; ‰ Howtofinancecompetitiveandsustainableairportcitiesorthe “Aerotropolis”inpractice?ͲͲ proactivelanduseplansandspecific valuecapturetechniquesalongairportͲaccesstransitcorridors Land Value Capture Practice along HK’s Airport Express Line “R+P” Joint Developments & Ave. Rents

MTR Corporation’s Net Profit 2000-2012 Railwayandrelated operations 13% Propertydevelopments 34% 15% Total US$19.4b Stationcommercial 2000Ͳ12 business 38% Rentaland management businesses

Sources: Murakami & Cheung (2014); Cervero & Murakami (2009); Al, Stefan (2014); Suzuki et al. (2014)

Jin Murakami [email protected] March 21, 2014 @ Berkeley CA City

Acknowledgements:

Ms. Yurika Matsui, The University of Tokyo Prof. Hironori Kato, The University of Tokyo Mr. Weimin Lin, City University of Hong Kong References:

Cervero,Robert,andJinMurakami.“RailandPropertyDevelopmentinHongKong:Experiencesand Extensions.”UrbanStudies 46,no.10(August14,2009):2019–43.doi:10.1177/0042098009339431.

Lin,Weimin.TheLastMileCostsofIntercityTransportationServicesinHongKong࣯:ASpatialandCrossͲ IndustrialAnalysis.Dissertation.HongKongSAR,China:CityUniversityofHongKong,July2013. (Supervisor:Dr.JinMurakami)

Matsui,Yurika.ImpactofRailAccesstoInternationalAirport onEconomicProductivity:CaseStudies acrosstheWorldBusiestCitiesandtheTokyoMetropolitanArea.Thesis.Tokyo,Japan:TheUniversity ofTokyo,February2014.(Supervisor:Prof.HironoriKato)

MTRCorporation.AnnualReport2012:SharingOurGrowth.HongKong,2013. http://www.mtr.com.hk/eng/investrelation/2012frpt.htm.

Murakami,Jin,Weimin Lin,YiZhang,andLeoCheung.AirportAccessTransitandUrbanDevelopment: ASpatialAnalysisonLastͲMileCosts,ResidentialProfiles,andBusinessAgglomerationsinHongKong. HongKongSAR,China:CityUniversityofHongKong(Forthcomingin2014).

Suzuki,Hiroaki,JinMurakami,YuͲHungHong,andBethTamayose.FinancingTransitwithLandValues: AdaptingDevelopmentͲbasedLandValueCaptureinDevelopingCountries.TheWorldBank.Urban DevelopmentSeries.Washington,D.C.,(Forthcomingin2014).