Economic Impact Analysis on Regional Industries by High-Speed Rail Investments: Application of an Input-Output Model

High-speed rail (HSR) systems have advantages over road and air transport, but they require significant financial investment. The economic viability of HSR systems has been analyzed through various methods. The approaches used cannot consider all intangible variables, or cannot satisfy the needs of all stakeholders. Particularly, in situations when policy makers are considering the construction of a new HSR system to stimulate the regional economy, detailed economic effects need to be measured. Hence, this research focuses on: (a) formulating a methodological framework to utilize an input-output (I-O) model in a given region where the regional I-O table is not provided, and (b) quantifying actual economic effects on regional industries by new HSR investment as a case study. Specifically, a four-step process with an I-O model is proposed, and a three-point effect (output, employment, and income) is assessed in Sejong, Republic of Korea. The effects of building a new HSR station in Sejong might generate over $100 million in output, over $21 million in income, and almost 1,000 jobs. Construction of railroad tracks would have more effects on the regional economy with over $1,671 million output, over $37 million income and over 145,000 jobs. In this study, only publicly available data sources are considered to propose the methodology. This approach, therefore, can be repeated for policy analyses in other locations where the data is limited. Further, regardless of the type of transportation investment, this approach can be used by policy makers seeking secure decisions to quantify economic effects on regional industries.