The “Highway Effect” on Public Finance: Case of the STAR Highway in the Philippines
Yoshino, Naoyuki; Pontines, Victor | October 2015
Abstract
In this study, we examine the impact of the STAR highway located in Batangas province, Philippines, on the public finance of the cities and municipalities through which it directly passes. Specifically, we exploit a unique, disaggregated dataset on tax (property and business taxes) as well as non-tax revenues (regulatory fees and user charges) of the cities and municipalities in the Batangas province. We find, based on our two specifications of a modified difference-in-difference model, that the STAR highway had a robust, statistically significant, and economically growing impact on business taxes. We also find that this so-called “highway effect” also extends to municipalities located in a neighboring province to Batangas. Furthermore, based on more careful inspection and robustness checks, it appears that the STAR highway had a significant impact not only on business taxes, but also on property taxes and regulatory fees. These findings support the widely held belief that infrastructure investments matter; further, our micro-case study suggests that infrastructure investments can indirectly boost tax and non-tax revenues through their power to reduce transportation costs and enhance the activity of firms and workers located along the highway.
Citation
Yoshino, Naoyuki; Pontines, Victor. 2015. The “Highway Effect” on Public Finance: Case of the STAR Highway in the Philippines. © Asian Development Bank Institute. http://hdl.handle.net/11540/9667.Keywords
Bus Transportation Costs
Demand For Transport
Means Of Transport
National Transport
Passenger Transport
Road & Highway Transport
Road Transportation Systems
Sea Transport
Transport Costs
Transport Efficiency
Transport Infrastructure
Transport Planning
Transport Policy
Transport Services
Transport Systems
Transport Tax
Transportation
Tolls
Ports
Seaports
Development projects
Physical infrastructure
Soft infrastructure
Infrastructure finance
Infrastructure bonds
Transport infrastructure
Roads
Highways
Railways
Ports
Airports
Pipelines
Water supply
Power production
Power transmission
Power distribution
Telecommunications
Infrastructure connectivity
Cross border connectivity
Modes of transport
Airports
Ports
Shipping
Taxis
Vehicle
Automobile industry
Road traffic
Inland transport
International transport
Public transport
Urban transport
Transport projects
Transport workers
Transport statistics
Transport networks
Urban traffic
Road Tolling
Communication and traffic
Navigation
Transport planes
Air transportation industry
Air transportation system
Intra-airport transportation
Inland water transportation
Intercoastal shipping
Marine transportation
Local transit
Highway transportation
Motor transportation
Student transportation
Choice of transportation
Public transportation
Transportation industry
Mass transit
Municipal transit
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Citable URI
http://hdl.handle.net/11540/9667Metadata
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