Abstract This study examines the causal relationship between wealth and transportation. The study first develops two alternating theoretical frameworks between wealth and transportation: one in which transportation is demand-driven and one in which transportation has dual role, demand-driven and supply-driving. Next, the study undertakes Granger-causality estimations for a panel of 18 countries over the period 1970–2017. It is found that the dominant Granger-causality relationship is bidirectional for majority of countries. The study also shows that there is high consistency in the Granger-causality relationship between wealth and transportation, and income and transportation. The study has three important contributions: First, the relationship between wealth and transportation is shown both theoretically and empirically. Second, transportation is shown to have dual role in an economy. Finally, it is shown that the wealth-transportation relationship and the transport-income relationship are equally robust and consistent.

    Highlights The dominant type of Granger-causality between transportation and wealth is bidirectional. Transportation has a dual role in an economy, demand-driven and supply-driving. The wealth-transportation and the income-transportation relationships are equally robust and consistent. Transportation may act à la technological progress against the law of diminishing marginal physical product.


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    Title :

    The Granger-causality between wealth and transportation: A panel data approach


    Contributors:

    Published in:

    Transport Policy ; 97 ; 19-25


    Publication date :

    2020-07-08


    Size :

    7 pages




    Type of media :

    Article (Journal)


    Type of material :

    Electronic Resource


    Language :

    English




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