DOHA: A research by Assistant Professor of Economics at Georgetown University in Qatar, Dr Jose Asturias on India’s largest and recently built highway project, The Golden Quadrilateral, seeks to study how economic competition changes after new transportation infrastructure is built and ultimately how this affects income in the country.
The grant winning research was presented at the university’s regular Faculty Research Colloquium on campus.
Working with his research partners, Manuel Garcia-Santana from Pompeu Fabra University and Roberto Ramos from the Bank of Spain, Dr Asturias looked at 29 different Indian states to compiled data from 200 manufacturing plants that have more than 95 percent of sales shares, compared the cost of transportation of the goods produced by those plants before and after the construction of the new highway system using complex economic models, and predicted the economic outcomes using a supercomputer at Texas A&M in Doha.
“Our model predicted that in India, the impact of this new infrastructure has caused an increase in real income per year at the rate of 2.04. That means that the calculated annual benefits of the road project is an increase of 3.15 billion dollars per year. That’s a pretty good return for an investment of 5.6 billion, the cost of building this highway network connecting many of the major industrial, agricultural and cultural centres of India.” He said that importance of the research findings go well beyond the Indian context. “Transportation costs are particularly high in developing countries. In the US it’s 10 percent, and in India it is high at around 45 percent. This can have a tremendous impact on competition, market efficiency and ultimately worker welfare. This model and our findings can be used by policy makers worldwide to capture gains that normal models don’t.”
The funding for the research project came from support provided by GU-Q as well as a grant from the Private Enterprise Development in Low Income Countries (PEDL), a joint research initiative of the UK government’s Department for International Development and the Centre for Economic Policy Research, an organisation of European economists based in the UK.
The Peninsula
DOHA: A research by Assistant Professor of Economics at Georgetown University in Qatar, Dr Jose Asturias on India’s largest and recently built highway project, The Golden Quadrilateral, seeks to study how economic competition changes after new transportation infrastructure is built and ultimately how this affects income in the country.
The grant winning research was presented at the university’s regular Faculty Research Colloquium on campus.
Working with his research partners, Manuel Garcia-Santana from Pompeu Fabra University and Roberto Ramos from the Bank of Spain, Dr Asturias looked at 29 different Indian states to compiled data from 200 manufacturing plants that have more than 95 percent of sales shares, compared the cost of transportation of the goods produced by those plants before and after the construction of the new highway system using complex economic models, and predicted the economic outcomes using a supercomputer at Texas A&M in Doha.
“Our model predicted that in India, the impact of this new infrastructure has caused an increase in real income per year at the rate of 2.04. That means that the calculated annual benefits of the road project is an increase of 3.15 billion dollars per year. That’s a pretty good return for an investment of 5.6 billion, the cost of building this highway network connecting many of the major industrial, agricultural and cultural centres of India.” He said that importance of the research findings go well beyond the Indian context. “Transportation costs are particularly high in developing countries. In the US it’s 10 percent, and in India it is high at around 45 percent. This can have a tremendous impact on competition, market efficiency and ultimately worker welfare. This model and our findings can be used by policy makers worldwide to capture gains that normal models don’t.”
The funding for the research project came from support provided by GU-Q as well as a grant from the Private Enterprise Development in Low Income Countries (PEDL), a joint research initiative of the UK government’s Department for International Development and the Centre for Economic Policy Research, an organisation of European economists based in the UK.
The Peninsula
