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Transportation Improvements

Enhanced Regional Accessibility S ho L o r n t g T

e T

r Higher Wages at the Appreciation in Land e m r

Periphery, Slightly and Real Estate Values m E

ff Lower Wages at Core in the periphery Ef e f c e ts c t s

Socio-Economic Convergence

Reduction of Spatial Disparities

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'JHVSF  4UVEZ BSFB

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XFMMCFJOH FH QPQVMBUJPO OVNCFS PG EXFMMJOHT SFTJEFOUJBM EFOTJUZ BOE UIF TPDJP FDPOPNJD DMVTUFS PG UIF DJUZ BT XFMM BT PUIFS UPQJDT TVDI BT DPOTUSVDUJPO USBOTQPSU BOE JOGSBTUSVDUVSF 4PDJPFDPOPNJD BOE MBCPSGPSDF EBUB XFSF DPMMFDUFE GSPN UIF  QFSDFOU TBNQMF PG UIF  *TSBFM $FOTVT PG 1PQVMBUJPO BOE )PVTJOH ɨJT EFUBJMFE EJTBHHSFHBUFE EBUBCBTF TVQQMJFT JOGPSNBUJPO PO UIF TPDJBM BOE EFNPHSBQIJD DIBSBDUFSJTUJDT PG UIF QPQVMBUJPO ɨF EBUB VTFE GSPN UIJT TPVSDF JODMVEF EFNPHSBQIJD HFPHSBQIJD FN QMPZNFOU BOE MBOE VTF WBSJBCMFT ɨF SBX TBNQMF TVQQMJFE CZ UIF $#4 JODMVEFE    SFDPSET 4JODF UIF NPEFM GPDVTFT PO UIF MBCPS NBSLFU JOEJWJEVBMT OPU CFMPOHJOH UP UIF DJWJMJBO XPSLGPSDF FH DIJMESFO VOEFS UIF BHF PG  PS EP OPU XPSL XFSF SFNPWFE GSPN UIF TBNQMF 0VU PG UIF SFNBJOJOH SFDPSET PG XPSLJOH JOEJWJEVBMT BEEJUJPOBM SFDPSET XFSF ëMUFSFE PVU EVF UP iVOLOPXO JODPNFw PS SFQPSUFE i[FSP JODPNFw %VF UP $#4 DPOëEFOUJBMJUZ DPODFSOT DJUZ SFTJEFODF BOE XPSLQMBDF DPEFT BSF POMZ SFQPSUFE GPS DJUJFT BCPWF   JOIBCJUBOUT *O BEEJUJPO UP UIJT SFTUSJDUJPO B TJHOJëDBOU OVNCFS PG JOEJWJEVBMT EJE OPU SFQPSU UIFJS QMBDF PG XPSL SFDPSET GPS XIJDI JU XBT JNQPTTJCMF UP NBUDI BO FNQMPZFFT QMBDF PG SFTJEFODF UP UIFJS QMBDF PG XPSL XFSF BMTP SFNPWFE 0VU PG UIF SFNBJOJOH PCTFSWBUJPOT B GFX NPSF DBTFT XFSF SFNPWFE EVF UP WBSJPVT SFBTPOT FH NJTTJOH WBMVFT JO LFZ WBSJBCMFT TVDI PDDVQBUJPO TNBMM UPXOT UIBU IBE OP NBUDIJOH BHHSFHBUFE DJUZ DIBSBDUFSJTUJDT EBUB FUD  ɨF ëOBM EJTBHHSFHBUFE $FOTVT EBUBTFU VTFE JO UIJT TUVEZ JODMVEFT B UPUBM PG   PCTFSWBUJPOT ɨF IPVTJOH QSJDF EBUB XFSF PCUBJOFE GSPN UXP TPVSDFT BO BENJOJTUSBUJWF EBUBTFU TVQQMJFE CZ UIF .JOJTUSZ PG $POTUSVDUJPO BOE )PVTJOH   BOE BO JOEFQFOEFOU TVSWFZ CBTFE PO B TBNQMF PG SFBMFTUBUF *OUFSOFU TJUFT ɨF EBUBTFU JODMVEFT EBUB PO UIF OVNCFS PG USBOTBDUJPOT JO FBDI DJUZ OPNJOBM BOE SFBM QSJDFT QFS TRVBSF NFUFS JO /FX *TSBFMJ 4IFLFMT /*4 QSJDFT QFS SPPN JO /*4 BOE QSJDFT QFS BQBSUNFOU JO /*4 5SBWFM UJNF EBUB GPS EJêFSFOU NPEFT BVUPNPCJMF CVT USBJO XFSF FYUSBDUFE GSPN OBUJPOBM USBWFM UJNF NBUSJDFT QSFQBSFE GPS UIF *TSBFM .JOJTUSZ PG 5SBOTQPSU "# 1MBO   ɨFTF NBUSJDFT XFSF PCUBJOFE GSPN USBïD BTTJHONFOU NPEFM PVUQVUT GPS ". QFBL IPVS EFNBOE NBUSJDFT GPS UIF ZFBS  3FQSFTFOUBUJWF USBWFM UJNFT CFUXFFO DJUJFT XFSF DBMDVMBUFE CZ FYUSBDUJOH UIF DFOUSPJE PG FBDI DJUZ QPMZHPO BOE DPNQVUJOH UIF SFTQFDUJWF UJNFT CFUXFFO UXP DFOUSPJET 'PS UIF QVSQPTFT PG UIJT QBQFS JU JT TBGF UP BTTVNF UIBU UIF USBWFM UJNF EBUB SFQSFTFOU UIF NBHOJUVEF PG UIF TQBUJBM GSJDUJPO CFUXFFO UIF DJUJFT ɨF UISFF BHHSFHBUFE EBUBTFUT DJUZ DIBSBDUFSJTUJDT IPVTJOH QSJDF USBWFM UJNF XFSF NFSHFE JOUP UIF SFëOFE EJTBHHSFHBUFE DFOTVT EBUBTFU (JWFO UIF MJNJUBUJPOT PG UIF EBUB DFSUBJO BTTVNQUJPOT XFSF NBEF GPS UIJT TQFDJëD TUVEZ ɨF NPEFM BTTVNFT GVMM FNQMPZNFOU JO B iDMPTFEDJUZw TZTUFN ɨJT BTTVNQUJPO GBJSMZ DPNNPO JO FDPOPNJD NPEFMT NFBOT UIBU BMM XPSLFST BSF FNQMPZFE BOE NBZ PêFS UIFJS MBCPS TFSWJDFT POMZ JO DJUJFT XIJDI CFMPOH UP UIF DIPJDF TFU *O BEEJUJPO OP XPSL JT QPTTJCMF PVUTJEF UIF  +ÿąĂþñü ÿö 5ĂñþăĀÿĂĄ ñþô -ñþô 6ăõ Ǭǫ

TZTUFN FH BCSPBE 

 .PEFM 4QFDJöDBUJPO

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Vin = β1 x1in + β2 x2in + L + βk xkin 

eVin Pin =  eVjn J Cn ∈ 8IFSF ! Vin  4ZTUFNBUJD PCTFSWFE VUJMJUZ PG BMUFSOBUJWF i GPS JOEJWJEVBM n Xkin  "U USJCVUF k PG BMUFSOBUJWF i GPS JOEJWJEVBM n Cn  4FU PG BWBJMBCMF BMUFSOBUJWFT UP JOEJWJEVBM n 4FWFSBM VUJMJUZ TQFDJëDBUJPOT XFSF UFTUFE BOE BSF EFUBJMFE JO UIF OFYU TFDUJPO

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'JHVSF  "UUBJONFOU PG FRVJUZ JOEJDBUPS JO UIF NPEFM

Aggregation Stage

Parameters * Vij – Pij - Disaggregated Parameter n Utility of Probability Pij * Employed at MNL Model Estimation differentials i,j work of i,j work residence city i (Ei) (IV) selection selection

Eij - Number of Transport Employees living Eij * wage i,j Qij - Total i,j Improvements in city i and payroll working at city j

Q labor at j= E ∑ ij ∑ ij wage at j = i i ∑ Eij i

∑Qij labor at i= Ei j wage at i = Ei

JOEJWJEVBMT MJWJOH JO SFTJEFODF DJUZ i BOE XPSLJOH JO DJUZ j Qij  ɨF BWFSBHF XBHF BU i BWFSBHF XBHF PG JOEJWJEVBMT XIP SFTJEF JO B QBSUJDVMBS DJUZ JT PCUBJOFE CZ

j Qij w¯i =  !Ei

ɨF XBHF BU i w¯i SFQSFTFOUT UIF FRVJUZ JOEJDBUPS JO UIF NPEFM ɨF IJHIFS JU JT UIF HSFBUFS UIF XFMGBSF JO B QBSUJDVMBS DJUZ 8IFO USBOTQPSUBUJPO JNQSPWFNFOUT BSF NBEF TFF SFE CPY BOE USBWFM UJNF JT DPOTFRVFOUMZ SFEVDFE UIF FTUJNBUFE TQBUJBM JNQFEBODF DPFïDJFOU JT NVMUJQMJFE CZ UIF OFX USBWFM UJNF EJêFSFOUJBMT ɨJT DIBOHFT UIF VUJMJUZ BOE DPOTFRVFOUMZ UIF QSPCBCJMJUZ PG TFMFDUJOH B XPSL DJUZ j CZ SFTJEFOUT PG DJUZ i %VF UP UIFTF DIBOHFT OFX XBHF WFDUPST BSF DSFBUFE BU i BOE DPOTFRVFOUMZ OFX FRVJUZ NFBTVSFT BSF BUUBJOFE

 3FTFBSDI öOEJOHT

5BCMF  QSFTFOUT B TVNNBSZ PG BWFSBHF PêFSFE XBHFT BOE OVNCFS PG FNQMPZFFT QSPYZ UP UIF OVNCFS PG KPCT BU XPSL EFTUJOBUJPO JO TFMFDUFE TUVEZSFHJPO DJUJFT "T DBO CF TFFO GSPN UIF UBCMF UIFSF BSF DMFBS EJêFSFODFT o QFSDFOU JO UIF QSPQPTFE XBHFT CFUXFFO #FFSTIFCB BOE JUT TVSSPVOEJOH TBUFMMJUF UPXOT ɨF XBHF EJTQBSJUZ CFUXFFO UIFTF UPXOT BOE 5FM "WJW JT BMNPTU EPVCMF SBOHJOH GSPN  QFSDFOU JO UIF DBTF PG 3B  +ÿąĂþñü ÿö 5ĂñþăĀÿĂĄ ñþô -ñþô 6ăõ Ǭǫ

IBU UP  JO UIF DBTF PG /FUJWPU "MUIPVHI 3BIBU JT POF PG UIF QPPSFTU "SBC #FEPVJO UPXOT JO *TSBFM UIF BWFSBHF PêFSFE XBHF UIFSF JT IJHIFS UIBO JO TPNF PG UIF +FXJTI UPXOT ɨJT JT EVF UP UIF GBDU UIBU NPTU PG UIF GFX BWBJMBCMF KPCT JO 3BIBU BSF JO UIF QVCMJD TFDUPS UFBDIFST NVOJDJQBM XPSLFST FUD  ɨFSF BSF NVDI TNBMMFS XBHF EJTQBS JUJFT CFUXFFO UPXOT JO UIF #FFSTIFCB NFUSPQPMJUBO BSFB BOE UPXOT BOE PUIFS TPVUIFSO DJUJFT FH "TIEPE "TIRFMPO 2JSZBU (BU MPDBUFE OPSUI PG UIF HSFBUFS #FFSTIFCB BSFB BOE TPVUI PG UIF 5FM "WJW NFUSPQPMJUBO BSFB "OPUIFS OPUBCMF EJêFSFODF CFUXFFO UIF TPVUIFSO QFSJQIFSZ BOE DPSF SFHJPO DJUJFT JT JO UIF OVNCFS PG KPC PQQPSUVOJUJFT UIF 5FM "WJW NFUSPQPMJUBO BSFB PêFST NPSF UIBO UFO UJNFT NPSF KPCT UIBO UIF #FFSTIFCB NFUSPQPMJUBO BSFB

5BCMF  0êFSFE XBHFT BOE KPCT JO TFMFDUFE DJUJFT "WFSBHF 0êFSFE /VNCFS PG /VNCFS .POUIMZ 8BHF JO &NQMPZFFT +PCT BU PG $JUJFT  /*4 8PSL %FTUJOBUJPO #FFSTIFCB      /FUJWPU +FXJTI      0GBRJN +FXJTI      3BIBU "SBC #FEPVJO     4EFSPU +FXJTI      0UIFS DJUJFT JO #FFSTIFCB      .FUSP 5PUBM #FFSTIFCB .FUSP "SFB      4PVUIFSO $JUJFT OPU QBSU PG      #FFSTIFCB .FUSP "SFB 5FM "WJW +FXJTI      $PSF DJUJFT      *O   64   /FX *TSBFMJ 4IFLFMT /*4

5BCMF  QSFTFOUT B USBWFM UJNF NBUSJY UIBU TIPXT BVUP USJQ MFOHUIT JO NJOVUFT EVSJOH ". QFBL IPVST CFUXFFO TFMFDUFE DJUJFT JO UIF #FFSTIFCB NFUSPQPMJUBO BSFB BOE 5FM "WJW "T DBO CF TFFO GSPN UIF UBCMF USJQ MFOHUIT CFUXFFO #FFSTIFCB BOE JUT TVSSPVOEJOH TBUFMMJUF UPXOT SBOHF CFUXFFO  BOE  NJOVUFT XIFSFBT USJQT MFOHUIT CFUXFFO UIF WBSJPVT #FFSTIFCB NFUSPQPMJUBO BSFB UPXOT BOE 5FM "WJW BSF JO UIF o NJOVUF SBOHF

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Tel Aviv

Beersheba

Arad

Netivot `

Ofaqim

Sderot

2500 3000 3500 4000 4500 5000

Wage at i in 1995 NIS

Base Scenario 20% improvement in Car Travel Time Introduction of a Rail Link

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0.25

0.20

0.15

0.10 Arc Elasticity of Wage with Wage of Elasticity Arc 0.05 Respect to Change in Travel TimeTravel in Change to Respect

0.00 Ofaqim Arad Sderot

4% ATT Reduction 8% ATT Reduction 12% ATT Reduction 16% ATT Reduction 20% ATT Reduction

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Tel Aviv

Beersheba

Arad

Netivot

Ofaqim

Sderot

0.6 0.65 0.7 0.75 0.8 0.85 0.9 0.95 1 Wage at i as a Percentage of the Average Wage in Core

Base Scenario 20% improvement in Car Travel Time Introduction of a Rail Link

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Beersheba

Arad

Netivot

Ofaqim

Sderot

0.8 0.85 0.9 0.95 11.05

Wage at i as a Percentage of the Average Wage in Be'er Sheva

Base Model 20% improvement in Car Travel Time Introduction of a Rail Link

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