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We explore how the transport improvements impact agglomeration and thereby productivity in mid-Sweden including Stockholm 1995-2006. We measure agglomeration, and changes in agglomeration in response to transport improvements, based on travel times. This is a more accurate measure of agglomeration than previously used and also necessary for understanding how governments can impact agglomeration, and thereby productivity, by transport investments. We regress temporal changes in wages on temporal changes in agglomeration applying a FE estimator. We deal with the potential endogeneity using a novel instrument variable. Our best estimates of the agglomeration elasticity on productivity lie within the interval 0.028-0.035.

The purpose of this paper is to improve the tools available for analyzing and evaluating land use and transport policies in a regional planning context. A normative residential location submodel is combined with a predictive submodel for the location of employment. The demand side of the residential location submodel is formulated as a nested multinomial logit model of the joint choice of residential location submodel is formulated as a nested multinormial logit model of the joint choice of residential location and transportation mode. The cost of commuting is assumed to be a major determinant of locational choice. The employment location submodel is based on the assumption that accessibility to the labor force is the strategic location factor. Two versions of the submodels are proposed corresponding to a post‐ and pre‐distribution modal split in the familiar four step transport model. Policy tests of a newly proposed, large‐scale traffic investment program in the Stockholm region are reported.

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