The Distributional Impacts of Transportation Networks in China

This paper evaluates the distributional impacts of transportation networks in China.We show that the quality of roads and railroads vary substantially over time andspace, and ignoring these variations biases the estimates of travel time. To account forquality differences, we construct a new panel dataset and approximate quality usingthe design speed of roads and railroads that varies by vintage, class, and terrain at thepixel level. We then build a dynamic spatial general equilibrium model that allows formultiple modes and routes of transportation and forward-looking migration decision.We find aggregate welfare gain and less spatial income inequality led by expandingtransportation network