Economic impacts of new or improved rail lines

The UK Department for Transport wanted to explore the link between rail investment and local growth, but there was a lack of ex-post evaluation evidence.

The hypotheses were that new and improved rail lines:

  • Increased convenience for local people
  • Increase attractiveness as places; and
  • Local businesses get improved access to employees, customers and suppliers

A team from Steer Davies Gleave and Cambridge Econometrics came together to test these hypotheses using both primary and secondary data collection and econometric analysis, the latter by Cambridge Econometrics using firm-level data for employment and turnover.

Six diverse schemes were selected for the study, three retrospective (Corby, Falmouth and Leamington Spa) and three comparative areas (Oxford Parkway, Bromsgrove and Swindon) were selected and trends compared before and after improvements.


  • Improved rail linkages can have a positive and statistically significant effect on a local economy
  • But which sectors they affect depends on the location. So, for example, they might help tourism in place A, retail in place B, and logistics in place C
  • Over the timescales studied (5-6 years) improvements in connectivity seem to drive growth in employment, rather than productivity

To read the full report, please see

NIRL DfT Exec Summary

Adam Brown Principal Economist [email protected]