The Welfare and Productivity Effects of Transit Improvements in Amman

This paper studies the long-run welfare and productivity effects of transit improvements in the Greater Amman Municipality. The paper builds a rich quantitative spatial model that includes many aspects of the economic geography of Amman. It studies the effects of new bus rapid transit lines that improve the connection of more peripheral areas to the city center, in two phases: phase 1 (approximately) connecting the north-eastern and north-western regions, and phase 2 adding the southern and south-westerns regions. It finds that the bus rapid transit increases output by 4.4 to 5 percent in phase 1 and 7.2 to 7.6 percent in phase 2. Workers in manufacturing benefit the most, and they also lived farthest from the city center before the bus rapid transit was established. Welfare in all neighborhoods increases, with the largest increases at the outer ends of the new bus rapid transit lines. Phase 1 generally promotes densification and welfare in already dense locations, while phase 2 encourages additional densification to the south. Our preliminary analysis of the interaction of zoning restrictions with the bus rapid transit suggests that legal zoning limits are binding in a few locations where excess demand for real estate after the expansion of bus rapid transit is expected to be large