Published in May 2018, the Department for Transport’s ‘Quantifying Wider Economic Impacts of Agglomeration for Transport Appraisal: Existing Evidence and Future Directions’ is concerned with the Wider Economic Impacts (WEIs) of transport improvements that arise via agglomeration economies. ‘Agglomeration economies’ are localised economies in which a large number of companies, services and industries exist in close proximity to one another and benefit from the cost reductions and gains in productivity that result from this proximity. The term ‘agglomeration’ refers to the spatial concentration of economic activity in cities.

This Report reviews the background theory and empirical evidence on agglomeration, explains the link between transport and agglomeration, and describes a three-step procedure to evaluate agglomeration impacts for transport schemes. This procedure can be applied across different regions and may support funding decisions about transport improvements in the North. The Report concludes with a set of recommendations for future empirical work on agglomeration and transport appraisal.