Received: 2023-01-06  |  Accepted: 2023-03-08  |  Published: 2023-03-30


Agglomeration benefits and costs of investing in urban transport infrastructure


Theory and evidence suggest that a city owes its existence to an agglomeration benefit. An investment in urban transportation infrastructure may increase this benefit. While some years ago the agglomeration benefit of urban transportation was just a vague idea, recently its size has been estimated and the idea has gained concreteness and respectability. However, the theoretical literature has emphasized the agglomeration benefit that arises through immigration and higher population, while the empirical literature has emphasized the benefit that arises from effective density at constant population. A third strand of the literature has discussed transportation of goods. We bring together these theoretical and empirical literatures, and discuss which agglomeration benefits and costs are relevant for major categories of urban passenger and freight transport investment.


transport, agglomeration, effective density, cost-benefit analysis

JEL classifications

R13 , R42 , H43 , H54






The research is supported by the Norwegian Research Council Grant no 267 697, 'Impact'.

This is an open access issue and all published articles are licensed under a
Creative Commons Attribution 4.0 International License


Vennemo, Haakon
Oslo Metropolitan University, Oslo, Norway
Vista Analyse AS, Oslno, Norway
Articles by this author in: CrossRef |  Google Scholar

Journal title

Insights into Regional Development





Issue date

March 2023

Issue DOI


ISSN 2345-0282 (online)


VšĮ Entrepreneurship and Sustainability Center, Vilnius, Lithuania


Google Scholar

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