|Damania &|Pixel|Congo Basin|Deforestation,|Road upgrading has a large significant effect on the intensity and|
|---|---|---|---|---|
|Wheeler|||Conflict|extent of forest clearing. Road improvements in forested regions with|
|(2015)+||||agricultural potential creates a potential conflict.|

Source: Compiled by the authors. Note: Findings column is based on the main finding of the paper. An asterisk identifies peer-reviewed papers. Plus identifies papers following the instrumental variable approach.

# **5.3 Urban Transportation**

Urban transportation systems play an important role in shaping the growth and development of cities. Gonzalez-Navarro and Turner (2018) investigate the relationship between the subway network in the 632 largest cities worldwide and cities’ population, spatial configuration, and transit ridership. Large cities are more likely to have subways, although having a subway does not significantly affect the rate of urban growth. The data also indicate that subways cause cities to decentralize, with a doubling of the subway network causing the share of all light rail within 5 km of the center to decrease by about 2.2 percent in an average city. Curiously, subway expansion did not seem to have any impact on bus ridership. However, a 10 percent increase in subway extension does lead to a 6 percent increase in subway ridership.

A similar decentralization effect to the one that subways have on cities has also been observed with radial roads. In an early study of the United States, Baum-Snow (2007) concluded that a single interstate highway causes about 9 percent of the population of a U.S. city to decentralize. The study simulates welfare gains of 2 to 3 percent per additional highway ray for U.S. cities based on commuting cost effects.

Baum-Snow et al (2017) go on to examine similar issues for Chinese cities in the period 19902010. Similarly, they found that each radial highway displaces 4 percent of the city center population to surrounding regions, and ring roads displace about an additional 20 percent, with stronger effects in the richer coastal and central regions. The effect of railroads is even more pronounced. Each radial railroad reduces city center industrial GDP by about 20 percent, with ring roads displacing an additional 50 percent. These effects also lead to welfare gains, as the improved access provided by the infrastructure leads to cheaper housing in outlying areas while at the same time lowering the commuting costs per unit of distance traveled. Cheaper space increases firms’ allocation of space per worker, thereby increasing real wages and improving residents’ welfare. There are also potential productivity gains from railroads facilitating the movement of industrial production out of city centers, freeing up space for less land-intensive activities such as tradable services that stand to benefit more from agglomeration spillovers.

In developing cities, central areas with good accessibility concentrate the bulk of formal jobs, while lower-income peripheral areas, on the other hand, display limited accessibility and a high incidence of informal employment. As urbanization patterns spread out, public transport plays a critical role in ensuring that jobs remain accessible. Moreno-Monroy and Ramos (2021) estimate 38