Economic impact of urban planning

Economic impact of urban planning

Urban planning causes the functioning of urban objects and the urban environment, which will lead to economic impact. In order to measure these impacts, urban planners employ several different economic tools.

The economic impact of urban planning is related to:

1. The Economic impact of security threats (crime & terrorism)
2. The Economic impact of security measures
3. The Economics of criminal & terrorist behaviour

Examples of economic effects of urban planning

A scientific institute

The realization of a scientific knowledge institute will generate the following primary economic impact:

• Construction costs
• Maintenance costs
• Research grants from outside the city/region
• Knowledge valorisation (patents and licences)
• Efficiency (due to scale benefits)

And the following secondary economic impact:

• More productive research project development
• More productive applied sciences in business
• Economic spin offs suppliers
• Induced effects employees

A new highway

The primary economic impact generated by a sustainable highway consists of:

• Construction costs
• Maintenance costs
• Reduction of travel time and travel costs
• Traffic flow effects
• External effects such as safety effects, environmental effects and local noise and emission effects.

The realization of a new highway does not only generate effects for the direct owners and users of the highway, but could also generate the following secondary effects:

• An improved functioning of the markets in the local economy as a whole due to a reduction of transport costs.
• An improved functioning of labour markets due to its increased size.
• Scale and agglomeration advances due to an increased size of the market
• Spatial and strategic effects due to an improved reach ability of the area.

A newly developed tourist area

The impact of the development of a tourist area with hotels, apartments, bars and clubs, and so on, generates primary and secondary effects.The most important primary impact are the temporary effects caused by the construction phase. This phase will not only generate construction jobs, but will also generate business for the suppliers of the construction companies and public investments and income. On a more permanent basis, tourists will generate an impulse in consumption and the owners of real estate will generate economic value for the local economy. The above mentioned primary impact will also generate a secondary impact:

• First of all, the direct economic impact will generate jobs, turnover and revenues for other sectors in the economy such as: trade, the financial sector, transport & communication, manufacturing, and so on.
• Secondly, the tourist sector will generate business for the trade sector, the financial sector, the real estate sector, agriculture, and so on.

Related subjects

• Urban planning
• Economic impact

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