An application of land use, transport, and economy interaction model

Governments need to assess the benefits of transport projects to prioritize investments. It is imperative for governments to have tools that can closely estimate the actual benefits and impacts of investments in significant transport projects. Traditionally, the benefits of a transport project have been estimated by using a transport model, assuming fixed land use for the base and project case in the future. However, this approach cannot measure the impact of land-use changes as residents and businesses relocate to take advantage of lower travel and/or freight costs resulting from the project. Consequently, the benefits of the project may be under or overestimated, depending on its position within the transport network and how it reshapes land use patterns in the future. To overcome this drawback in existing models, this paper firstly presents a literature review of advances in the land use transport interaction model (LUTI), then discusses the development of a LUTI model for Victoria, Australia (VLUTI) by integrating the Victorian Integrated Transport Model with a Spatial Computable General Equilibrium model (SCGE). The land use component (SCGE) was developed to represent a highly resolved zone system, detailed classifications of occupations and industries, and spatial interactions via commuting, and trade in goods and services, and thus enables VLUTI to simulate a detailed and nuanced picture of land use and transport interactions in a complete economic environment. The literature review also indicates limited research in applying a LUTI to estimate land use change benefits. This paper presents an application of VLUTI by looking at differences in the conventional transport benefits under both static and dynamic land use scenarios. In the static method, the land use in the project case is unchanged from the base case. In the dynamic case, the land use in the project case, at a future point in time, is endogenously adjusted within VLUTI. It presents a method to correct, in the dynamic case, the benefits as estimated by the rule of a half, which usually assumes static land use. The paper concludes with suggestions for further developments and improvements of VLUTI such as incorporating an activity-based transport model and an environmental model to progress toward an integrated land-use, transport, economy, and environment model capable of assessing the full impact of a transport project in a holistic way.