Applying input-output analysis to the Australian rail industry: a value chain modelling approach

It has long been recognized that there are wider economic benefits through rail’s interindustry and intra-industry linkages, in addition to the direct impacts in time and costs savings that are assessed in conventional cost benefit appraisal. The impacts of rail are felt in other sectors of the economy through the effects of industry purchases and subsequent rounds of indirect and induced spending. This paper employs an input-output analysis to estimate the contribution of the industry on national economic output, income and employment. Empirical results show that input-output modelling provides policy makers with a powerful tool to quantify these linkages and assess the direct and indirect economic implications of a potential policy or regulation.