Page 398 - 360.revista de Alta Velocidad - Nº 5

Zhenhua Chen

Wage adjustment equation in dynamic TERM assumes that wages rise if the actual employment
is above the trend (predicted) employment (Wittwer et al. 2005). Since employment is
negatively related to real wages, a convergence between the actual employment and the trend
employment are expected to occur when the economic system reaches a long-term market
clearance. The relationship between wage and employment can be expressed as:

where W represents real wage, L and T represent actual employment and trend employment,
respectively. γ denotes a positive parameter to reflect the speed of labor market adjustment.

5. Data

One of the major challenges for a comprehensive economic impacts assessment of the rail in-
frastructure development in China is data limitation. This is particularly true if the assessment
is conducted at the regional level. As revealed in Chen et al. (2016), the assessment using a CGE
analysis requires two types of data: one represents the direct impact drivers, which are used
to calculate the magnitude of policy shock for CGE simulations. The other one is often referred
to as social accounting matrix, which serves as the benchmark data for CGE calibration. This
section discusses the data requirement for a regional economic impacts assessment of rail in-
frastructure. Our focus is on data that represents direct impact drivers which is often ignored in
previous studies . These data reflects land use change, the levels of capital investment, change
2
in transportation cost and productivity, all of which were directly driven by the development
of rail infrastructures.

• A. Land Use Change

Rail infrastructure development has two types of effect on land use change. One is a direct
effect which is due to an immediate land use for the development of rail facilities, such as
station, routes and maintenance centers. In addition, the development of rail system may also
lead to an extended land use effect due to its stimulus to urbanization, which is manifested by
a prosperity of real estate sectors and the development of HSR new towns. All these effects are
expected to have a negative effect on agricultural related sectors due to occupation of arable
land. Since land use data of rail construction at the regional level is not publicly available, one
alternative is to estimate the area size of land use for rail infrastructure systems based on the
following equation:

2 Plethora of studies using CGE for an impact assessment of transportation infrastructure system was based on hypothetical
scenarios, hence the levels of direct impact drivers were generally specified based on arbitrary assumptions, which has led to a
lack of underpinnings of policy shocks (Chen and Haynes, 2017).

396 360.revista de alta velocidad