by Brandon Musser
State Route 520 (SR 520) is a 12.8 mile corridor linking downtown Seattle and its Eastern suburbs of Bellevue, Kirkland, and Redmond (collectively known as the “Eastside”) which are separated by the 30 mile long Lake Washington. The route is of considerable economic importance to the greater Seattle area as it provides one of only two passages across the lake, connecting the dense downtown residential area to several large commercial centers, including Microsoft's main campus in Redmond which employs nearly 40,000 people (another employer in the area you may have heard of is Boeing). Every day, around 115,000 vehicles travel the four-lane, 2,285 meter long floating bridge which currently spans the lake. However, the bridge, which was opened in 1963, was originally designed to accommodate only 65,000 vehicles per day. During peak rush hours, traffic merging onto the bridge creates a bottleneck, turning the freeway into a parking-lot and the short 10-15 minute journey from Redmond to Seattle into an insufferable hour-long nightmare.
Construction is to begin in 2012 on a new bridge which will replace the existing bridge and expand the flow of traffic to six lanes, as well as a pedestrian path, and will be compatible with future inter-city light-rail proposals (http://www.wsdot.wa.gov/Partners/Build520/ ). Additional upgrades will be made to both on- and off-ramps, further improving the flow of traffic along the entire corridor, but especially in the vicinity of the bridge. The additional third lane (in each direction) will be a designated HOV lane (reserved for car-pools, motorcycles, and public transit), improving the reliability and attractiveness of using means of public transportation to commute to and from work. Much wider shoulders will also dramatically decrease the time of accident/breakdown response and cleanup/removal, which are often responsible for the worst traffic delays. The eventual implementation of light-rail will provide residents of the metropolitan centers of Bellevue and Seattle with a very quick, reliable point-to-point means of commuting which will avoid traffic all-together. The new bridge is scheduled to open in 2014, while a definite time-line has not yet been set for the light-rail.
The new bridge, along with the upgrades being made along the entire corridor in general should greatly reduce the cost of commuting between Seattle and the Eastside, not only in terms of dollars but in the opportunity cost of time as well. Using two different models of economic geography, we can speculate as to what kind of implications the drastically reduced transportation costs could have on the economic dynamics of the region. Predictions depend largely upon how one views the greater Seattle area; as two distinct regions (Seattle and the Eastside) or as one larger integrated economic region. According to the Krugman model of New Economic Geography, in a two region scenario exhibiting a mobile labor force, there are two forces in which reduced transport costs could induce agglomeration. The first being the price-index effect and the second being the home market effect (HME). Under the price-index effect, the larger market has an advantage because the price-index will fall with the size of the market, making products cheaper in that region. According to the HME, the region with higher aggregate income will enjoy a more than proportional amount of variety of consumer goods and a more than proportional amount of the higher-skilled workers, making the larger market more attractive. The NEG model would, therefore, suggest that lowering the transport costs between Seattle and the Eastside could spur agglomeration in the larger market (Seattle) at the expense of the smaller market.
On the other hand, if we consider the greater Seattle area to be one large market, the classic Von Thunen could offer insight as to the effects of reduced transport costs between Seattle and the Eastside. The model is used to examine crop selection based on bid-rent functions which depend heavily on the transport costs of various crops. In this case, we can think of different economic functions (industrial/commercial activities) with activity locations being based off of the same bid-rent functions. According to the model, as transport costs fall, so should the area of land profitable for agricultural activity, introducing opportunities for new activities that were once unprofitable under high transport costs to become profitable. To me, this scenario depicts a region becoming increasingly integrated as the flow of goods (or people) becomes less costly.
I believe the second model is more applicable to this case of decreasing East-West transport costs in the Seattle area as I believe the area is much more resemblant of an integrated market than two separate regions. Reduced transport costs could allow smaller or less profitable firms to locate on the periphery, where it was once unprofitable to do so because of the high costs of attracting skilled-workers from the core (downtown). In other words, reducing the costs of labor flows throughout the greater metropolitan area will make the region more attractive to (external) firms looking to relocate to the area by being able to locate near the periphery (taking advantage of lower big-rent costs) while still being able to draw from a very large pool of skilled-workers in the core. Relocation of firms to the area will also attract new workers, enhancing the overall economic activity of the region.