Travel and Regional Development: A Quantitative Analysis of China

Abstract

Intercity travel creates more pronounced interregional linkages and spatial effects than migration. However, few studies have integrated travel into general equilibrium models to assess its welfare and general equilibrium impacts. This study quantifies the impact on regional development of travel by developing a spatial general equilibrium model including trade, migration, and travel to quantify and compare the different effects of these three spatial linkages. We structurally estimate the model using data from 287 prefecture-level cities in China. The counterfactual analysis reveals that travel significantly impacts regional economic outputs, with effects roughly equivalent to those of migration. Additionally, travel demonstrates distinct mechanisms and effects on population distribution compared to the other two linkages. This study provides both theoretical and empirical insights into how various types of spatial linkages—particularly travel—affect interregional economic development. The findings are particularly pertinent for evaluating spatial policies, such as transportation infrastructure improvement and urban cluster development.