MEASURING THE DEVELOPMENT IMPACT OF A TRANSPORTATION SYSTEM: A SIMPLIFIED APPROACH*

The Multiregional Variable Input-Output (MRVIO) model is introduced to measure the development impact of a transportation system. The MRVIO model is a theoretically flexible, computationally simple, and cost-responsive model. Under the MRVIO model, regional input-output coefficients, trade coefficients, and trade flows become cost responsive and easy to compute. The MRVIO model is employed to measure the development impact of the Arkansas waterway during the period of 1974 to 1978. In the study, the U.S. economy is disaggregated into 3 regions and 35 industrial sectors. The MRVIO model estimates the economic conditions of these 3 regions with and without the waterway in terms of industrial output, income, employment, and trade flows.