Socio-economic Effects of Transport in California

Socio-economic Effects Associated with Transportation Facilities’ Improvement in California, United States

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Graduate Faculty of the School of BUSINESS AND TECHNOLOGY MANAGEMENT
in Partial Fulfillment of the Requirements for the Degree of DOCTOR OF PHILOSOPHY

Introduction
Increased demands for efficient travel have prompted worldwide projects focused on improving transportation facilities and networks/systems (Cooper, 2015).  The state of California has improved its transportation facilities in terms of efficiency (Cooper, 2012; Schone & Levinson, 2014). Transportation involves the movement of people, goods and animals from one location to another, using different types of modes such as road, rail, water, air, pipeline, cable and space (Alstadt, 2010). The transportation sector is comprised of the physical infrastructure, modes of transportation and operations, and has a fundamental role in facilitating economic development, by encouraging trade between persons and regions (Levinson & Huang, 2012; Vickerman, 2012; Vogel, 2012; Hazledine, Donovan, & Bolland, 2013).  Improving transportation infrastructure increases socio-economic outcomes, particularly increased earnings that arise from opening up of labor and consumer goods’ markets (Tilahun & Levinson, 2010). Transport facilities are diverse and consist of both fixed and flexible installations whereby the fixed installations include the roads, waterways, railways, canals, airways and pipelines; while flexible installations are the operational equipment installed in the fixed installations and can be easily moved (Weisbrod, 2009).

Socio-economic Effects Associated with Transportation Facilities’ Improvement in California, United States

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Economic development is associated with improved economic conditions of individuals, corporate and/or states (Tilahun & Levinson, 2010). This is largely because good transport systems lead to increased movement of goods and services at competitive rates. Socio-economic benefits associated with improved transportation infrastructure include increased mobility among residents and accessibility of spatial locations (McDermott, 2010; Cooper, 2012; Saunders & Dalziel, 2014). The state of California for instance, aims at improving the existing transport network in bid to cut down on costs that come with constructing a transport network from scratch. On the flip side of it, this will in turn enhance the socio-economic livelihoods of residents (McDermott, 2010; Fan, Guthrie & Levinson, 2012). Moreover, improved transport systems improve the quality of peoples’ lives mainly through increased levels of income per household due to the opportunities opened up such as increase in employment and market accessibility (Levinson & Huang, 2012; Saunders & Dalziel, 2014).This paper seeks to determine what effect improved transport network will have on socio-economic wellbeing of Californian residents. The research will adopt various models to examine the issue, by underpinning the study method that would then augment knowledge in the body of research (MacKinnon, Pine & Gather, 2008; Coleman 2010; Williamson, Philbin & Sanderson, 2012; Anderson, Levinson & Parthasarathi, 2013).
Statement of the Problem
Significant investments have been made in California to improve transport infrastructure and facilities without succinct assessment of economic benefits that ensue, which makes it essential to undertake this study and determine the relationship between the two variables (Cooper, 2012). Following the definition of transport infrastructure and economic development, this study intends to investigate the socio-economic effects of transportation facilities’ improvement this means that, the central focus of this paper shall be on the projects targeting to improve transport facilities and infrastructure in California in order to address the existing information gap. This means that there is information gap which if not timely addressed, then California State may not have succinct evidence of the extent to which transport infrastructure improvement influence socio-economic effects (Donovan, & Bolland, 2013; Saunders & Dalziel, 2014; Schone & Levinson, 2014). Furthermore, according to El-Geneidy & Levinson (2011) the economic benefits that results from improvements in transportation facilities are often considered location-specific, and results to economic growth leading to subsequent socio-economic benefits to peoples within a particular region. This means that, there is the need to determine the effects of improvements in transportation facilities on daily lives of California State citizens both socially and economically to solve the prevailing information gap problem (McDermott, 2010; Tilahun & Levinson, 2011; Cooper, 2012).

Socio-economic Effects Associated with Transportation Facilities’ Improvement in California, United States

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Purpose of the Study
The purpose of this quantitative, correlational study is to examine the socio-economic effects that accrue from the transport facilities in the state of California such as increased mobility, income levels and accessibility. The social and economic effects of quality of life of people residing in California State will be assessed. The target population for this study is the residents of California from which the research sample will be drawn using the employee list as the sampling frame. From the target population the inclusion and exclusion criteria will involve an exclusion of people not working in the transport sector. This means that the key inclusion criteria will include those working in the transport sector. Another exclusion criterion will be any person not likely to fill in the questionnaire based of health conditions. The sample size will be grouped into marital status, job level, income level and level of education, and these parameters will also be used as criteria for stratification. The sample size will be 174 participants determined by the G*Power as proposed by Cohen (1992) drawn from both employed and unemployed Californians of legitimate age with an assumed response rate of about 60% (Paltridge & Starfield, 2007; Babbie, 2010).  The determination of the sample size mainly followed the procedure proposed by Faul, Erdfelder, Lang & Buchner, (2007) in their respective statistical power analyses using G*Power. The sample size will be drawn from people living in the state of California for primary data through stratified random sampling. Furthermore, the geographic location of the study will be California State where participants will be randomly picked across the State where the study participants will be solely picked based on probability meaning any subject within the target population can constitute the sample size (Cohen, 1992; Donovan, & Bolland, 2013; Schone & Levinson, 2014). This will be done to ensure unbiased sampling through a balanced representation of the target population to guarantee integrity, reliability and validity of the study findings (Coleman 2010; Williamson, Philbin & Sanderson, 2012). The will be followed by the processing and coding of the collected data. Data analysis and presentation will be done using SPSS to enable hypothesis testing.

Socio-economic Effects Associated with Transportation Facilities’ Improvement in California, United States

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Research Questions
Specific quantitative research questions will be used to facilitate collection of primary data subsequent to testing of the research hypotheses. However, the research questions must also be in tandem with the research constructs/variables and should directly originate from the problem statement and purpose of the study which are to establish relationship between transport infrastructure improvement and socio-economic benefits and solve the existing information gap respectively. Hence, the research questions are aimed at making sure that the problem statement is addressed in order to establish the relationship between improvements on transportation facilities and infrastructure and economic benefits in California State. As a result, the quantitative research questions proposed for this study are as follows:
Q1. Is there a change in terms of reduce travel time following the improvement of transport facilities in the state of California?
Q2. Has improvement in transportation infrastructure resulted to creation of new employment opportunities in California?
Q3. Has the improvement in transportation infrastructure resulted to opening up of new businesses in California?
Q4. Does improvement in transport facilities lead to reduced cost in transporting goods and services?
Q5. Has travel been eased as a result of improvements in transportation facilities?

Research Objectives
1.    To determine whether or not change exist in terms of reduced travel time following improved transport facilities in the state of California.
2.    To established whether improvement in transport facilities has an impact on job creation?
3.    To understand whether or not improvement in transport facilities can bring about new businesses in the state of California?
4.    To determine whether improved transportation facilities is directly related to the reduced transportation cost of goods and services?
5.    To evaluate whether improvement in transport facilities lead to ease of travel

Socio-economic Effects Associated with Transportation Facilities’ Improvement in California, United States

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Hypotheses
The null and alternative hypotheses formulated for this study are as follows:
H10.  There been significant reduction in travel time as a result of improvements in transportation infrastructure in California.
H1a.  There has not been significant reduction in travel time as a result of improvements in transportation infrastructure in California.
H20.  There has been significant creation of new employment opportunities in California as a result of improvement in transportation infrastructure.
H2a. There has not been significant creation of new employment opportunities in California as a result of improvement in transportation infrastructure.
H30.  There has been a significant opening up of new businesses in California as a result of improvement in transportation infrastructure.
H3a. There has not been a significant opening up of new businesses in California as a result of improvement in transportation infrastructure.
H40.  There has been a significant reduction of cost of transporting goods as a result of transport infrastructure improvement in the state of California.
H4a. There has not been a significant reduction of cost of transporting goods as a result of transport infrastructure improvement in the state of California.
H50. The movement of Californians from one location to another has been significantly eased as a result of improvements in transportation facilities.
H5a. The movement of Californians from one location to another has not been significantly eased as a result of improvements in transportation facilities.
Definition of Key Terms
Transportation:  Transportation is the movement of people, goods and animals from one location to other using different types of modes such as road, rail, water, air, pipeline, cable as well as space (Anderson, Levinson & Parthasarathi, 2013).

Socio-economic Effects Associated with Transportation Facilities’ Improvement in California, United States

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Transportation facilities: These are the modes used to enable transportation (Junge & Levinson, 2012).
Economic benefits: These are the positive attributes associated with improvements of the economic conditions (Levinson, Xie & Montes de Oca, 2012).
Economic growth: This is referred to as the improvement of economic conditions of individuals, corporate and/or states (Carrion & Levinson, 2013).
Wage laws: These are the rules and regulations that act as a guideline for employer and employee relationship and remuneration (State of California Department of Industrial Relations, 2015).
Increased mobility: This is the ability of people to move from one location to another with ease (Litman, 2014).
Accessibility: This is referred to the ability to reach almost all parts within a region using a wide range of transportation modes (Fan, Guthrie & Levinson, 2012).
Income levels: These are the extent of earnings whether as an individual or per household (Coleman, 2010; McDermott, 2010; Tilahun & Levinson, 2011).
Chapter 2: Theoretical Framework
The transportation agencies have historically focused on the construction and expansion of major roads, bridges, and other transportation infrastructure (Arif and Bayraktar, 2012). However, the emphasis has drastically shifted from developing new infrastructure to intelligently maintaining existing ones. In recent years, budget tightening and increasing demands had also impacted the allocation of funds for the construction of transportation infrastructure. According to Arif and Bayraktar (2012) this situation has led to the emphasis on the development of asset management systems. At its core, asset management is a business process that changes not only the way of thinking in an organization but also in driving decisions based on concrete information (van de Walle and Cratty, 2002). A strong asset management system provides a solid foundation that optimizes the performance and cost effectiveness of transport facilities’ operations and maintenance (Iacono & Levinson, 2008).

Socio-economic Effects Associated with Transportation Facilities’ Improvement in California, United States

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2.0 Literature Review
2.1 Impacts of improving transport
Much as impacts of public transport investments can be of great importance, sustainable travel benefits are an essential justification for investing in public transport system that can in the long run result to more and more long term impacts on a country’s financial system. Previous studies show that direct benefits of improving transport networks are reduction in travelling time; reliability enhancements and increased safety (Banister, & Berechman, 2000). In addition, these benefits have the ability of providing financial savings for public transport commuters as well as commuters that continuous use other modes of transport. Benefits for users are obtained from valuing commuters’ effect capacity including changes in individual hours travelled or vehicle hour travelled, individual miles travelled or miles travelled per vehicle, safety and reliability enhancements. Then unit costs are used to these indicators to get the direct benefits.     A study conducted by Brooks, Pallis & Perkins, (2014), allege that units cost include vehicle operation expenses for each mile, value per hour and accident expenses per scenario. On the other hand, monetary values can be employed to ecological effects; nevertheless cannot be directly be translated to matching effects on the flow of dollar in the financial system, not unless costs are used including by way of emission charges.
Conventionally, public transport commuter costs reductions were the main factor considered as some of the benefits related to public transport investments (Brooks, Pallis & Perkins, 2014). However, this standpoint has considerably changed and currently its widely recognized that investment in public transport can be of great importance when it comes to minimizing congestion, with wider benefits particularly for commercial truck, access to labor market and business output.                        Therefore, direct economic effects for commuters can be vehicle operating costs reduction and parking fees for those changing from automobile to public transport. Moreover, a decrease in automobile congestion as a result of higher use of public transport generates travel time reduction and vehicle operating expenses especially for highways users.

Socio-economic Effects Associated with Transportation Facilities’ Improvement in California, United States

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2.2 Reliability Benefits
Investments in public transport can increase the aspect of reliability for public transport commuters, cars and trucks due to reduced traffic congestion. Previous studies demonstrate that occur due to increase traffic associated delays, which in turn enhance rates f collision while contributing to long traffic backups in the event of a collision of disabled truck (Banister, & Berechman, 2000). Therefore, removing some vehicles from the roads, public transport investments can significantly cut down delays and enhance reliability for highway users like commuters, cars, public transport drivers and trucks. Previous studies have tried providing an inclusive description of traffic related congestion, techniques to measure it and the manner in which it impacts labor markets, organizations and commuters (Banerjeey, Dufloz & Qian, 2012).                 The basis for reliability in the economic effect analysis is due to the fact that besides direct impacts on average travelling time, it has the possibility of affecting employee efficiency, delivery of goods and services and accessibility to the market. Unexpected delays in employee travelling time or arrival of goods and services can affect the ability of just-in-time production as well as inventory structures, need additional slack time in warehouse procedures and freight, and has the capacity of minimizing productivity especially in service calls. Conversely accessibility to market has a direct impact on costs structures and thus competitive costing. Considerable congestion can also interfere with coordination and productivity across various organizations (Anderson, Levinson & Parthasarathi, 2013).
2.3 Social Economic Transformations
Transport systems are closely related to socio-economic changes. The mobility of people and freight and levels of territorial accessibility are at the core of this relationship. Economic opportunities are likely to arise where transportation infrastructures are able to answer mobility needs and insure access to markets and resources. From the industrial revolution in the 19th century to globalization and economic integration processes of the late 20th and early 21st centuries, regions of the world have been affected differently by economic development. International, regional and local transportation systems alike have become fundamental components of economic activities (Iacono & Levinson, 2008). A growing share of the wealth is thus linked to trade and distribution. However, even if transportation has positive impacts on socio-economic systems, there are also negative consequences such as congestion, accidents and mobility gaps. Transportation is also a commercial activity derived from operational attributes such as transportation costs, capacity, efficiency, reliability and speed. Transportation systems are evolving within a complex set of relationships between transport supply, mainly the operational capacity of the network, and transport demand, the mobility requirements of an economy.

Socio-economic Effects Associated with Transportation Facilities’ Improvement in California, United States

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2.4 Increased Effectiveness
According to Iacono & Levinson (2008) the tremendous increase in the number of cars on the streets in big cities, has been the reason why many people leave their personal cars behind to use public transport facilities such as metro, tram or bus as the most effective means from one location to another. By and large, this has led to the need for continuous improvement of transportation facilities as well as infrastructure not only in California, but also in many other regions across the United States and the world over.
In reality, these improvements in public transport facilities are aimed at making sure that users are provided with detailed information concerning transport network connections. Theoretically these systems should also guarantee effective and reliable means of movement directly proportional to the investment made for improvements. Givoni (2006) states that people who use public transport facilities have increased their interest in knowing how to catch up with various means of transport as quick as possible from a particular location to a specified destination which has been made possible by the improvements caused by investment in transportation facilities and infrastructure.
2.4.1 Effective Mobility
Mobility is one of the most fundamental and important characteristics of economic activity as it satisfies the basic need of going from one location to the other, a need shared by passengers, freight and other stakeholders. All economies and regions do not share the same level of mobility. Economies that possess greater mobility are often those with better opportunities to develop transport networks than those with scarce mobility. Reduced mobility impedes development while greater mobility is a catalyst for development. Mobility is thus a reliable benchmark of development. The economic importance of the transport industry can thus be assessed from a macroeconomic and microeconomic perspective: At the macroeconomic level (the importance of transportation for a whole economy), transportation and the mobility are linked to the level of output, placement and income within a national economy. In many developed countries, transportation accounts between 6% and 12% of the GDP (Arif and Bayraktar, 2012).
At the microeconomic level (the importance of transportation for specific parts of the economy) transportation is linked to producer, consumer and production costs. The importance of specific transport networks can be assessed based on each comparative sector of the economy.

Socio-economic Effects Associated with Transportation Facilities’ Improvement in California, United States

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The added value and employment effects of transport services usually extend beyond employment and added value generated by that activity; indirect effects are salient.
For instance, transportation companies purchase a part of their resources (fuel, supplies, maintenance) from local suppliers. The production of these inputs generates additional value-added and employment in the local economy. The suppliers in turn purchase goods and services from other local firms (Carrion & Levinson, 2013). There are further rounds of local re-spending which generate additional value-added and employment. Similarly, households that receive income from employment in transport activities spend some of their income on local goods and services. These purchases result in additional local jobs and added value. Some of the household income from these additional jobs is in turn spent on local goods and services, thereby creating further jobs and income for local households. As a result of these successive rounds of re-spending in the framework of local purchases, the overall impact on the economy exceeds the initial round of output, income and employment generated by passenger and freight transport activities.
2.4.2 Travel Cost Savings
Investment in public transport can contribute to various forms of cost reductions for commuters; Changes in travelling cost as a result of transformations in travelling fares related to new transport services (Carrion & Levinson, 2013). It also modifies travel expenses for commuters changing from automobile as a result of a number of variations in public transport fare structures and vehicle operating expenses such as fuel, parking and maintenance fees. Travel costs also affects changes in ownership expenses due to potential depreciation, insurance and maintenance expenses applicable especially when automobile users end up with less automobile.
2.4.3 Travel Time Savings
Research by Alstadt, (2010) shows that upgrading public transport may contribute to different forms of travel time reductions including;
·    Time reductions for existing and new commuters in public transport as a result of enhanced services such frequent services or additional direct routes
·    Time reductions for existing and new commuters in congested metropolitan regions, enabled by buses or rail services operating on exclusive lanes hence avoid traffic congestion.
·    Time reductions for automobiles as well as truck commuters in congested roads that can currently use faster transport modes because of less vehicles on routes; because some commuters changing to public transport services.

Socio-economic Effects Associated with Transportation Facilities’ Improvement in California, United States

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2.5 Market accessibility
Transportation provides market accessibility by linking producers and consumers so that transactions can take place. A common fallacy in assessing the importance and impact of transportation on the economy is to focus only on transportation costs, which tend to be relatively low; in the range of 5 to 10% of the value of a good. Transportation is an economic factor of production of goods and services, implying that it is fundamental in their generation, even if it accounts for a small share of input costs. This implies that irrespective of the cost, an activity cannot take place without the transportation factor. Thus, relatively small changes in transport cost, capacity and performance can have substantial impacts on dependent economic activities.
2.5.1 Increased demand for goods and services
The immediate effect of transportation facilities investment is the direct employment generated by the construction of various transport infrastructures. Research demonstrates that developing infrastructures of any kind is as labor intensive per se.  The next crucial link is transport of goods and people. It is important to ensure that opportunities created by investment in improved transportation facilities are materialized through changes in transport services. There is an assumption that properly constructed roads are accompanied with an increase in demand for transport services and a corresponding decrease in the vehicle operating cost (van de Walle, 2007).
In the ideal case, this in turn will trigger competition and an associated decrease in transport prices under the assumption that affordable means of transport are available in the first place and decreases as vehicle operating costs are passed on to the customers. However, Howe (2005) states that there has been a tendency to assume that transportation facilities investment alone will lead naturally, through spontaneous interventions by the private sector, to improved services. Other factors such as the road network will also have an impact: Improved roads may not attract transportation services, if access to them is not linked by other roads of decent quality, bridges, ferries etc. The nature of the institutional framework for public and private transportation may also influence the decision of transport operators to set up business in a given area.
Growth is also dependent on the demographic and economic characteristics of the region where the improvements in transportation facilities and/or infrastructure are taking place. For instance, a given accessibility change will differentially have a bearing on consumption and location decisions for households with two employees than it will affect such decisions in households with a single employee (Khandker et al., 2006).
2.6 Reduced Cost of Doing Business

Socio-economic Effects Associated with Transportation Facilities’ Improvement in California, United States

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It is undoubtedly evident that historically, the fundamental outcome of investing in transport facilities improvement has been the relative change in prices for the accessibility of different locations within the area under consideration (Banister & Berechman, 2001). This is attributable to the fact that transport systems’ network structure results to non-uniformity in the spatial accessibility, an investment in new transportation facilities, improvement of the existing transportation facilities which eventually lead to alteration of the existing equilibrium structure mainly due to changes in the prices of accessing two locations.
In turn, these changes in prices imply variations in the relative advantage with regards to activities that are spatially located as well as economic opportunities both for consumption and production sectors. The reason that is attributable to these changes in prices is because the inputs costs (e.g. labor) and outputs prices (e.g. housing) at spatial locations change as a function of accessibility costs between the two spatial locations. Furthermore, Elhorst & Oosterhaven (2003) reiterated that the strength and extent of various scale, network and scope economies, which affects companies’ location decisions, may often become insignificant as there are improvements in relative accessibilities between spatially located regions.
According to Bardi et al. (2006) it is necessary to understand that the extent to which transportation facilities and/or infrastructure improvement affects economic

Socio-economic Effects Associated with Transportation Facilities’ Improvement in California, United States

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Socio-economic Effects Associated with Transportation Facilities’ Improvement in California, United States

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