Returns to investment in navigation infrastructure: An equilibrium approach

We argue that there are serious biases in public infrastructure productivit y estimates which are based on a production function? or a cost function fr amework. These biases arise because public infrastructure has important eff ects on the demands, as well as prices of the factors of production. In thi s study we estimate the productivity effects of investment in navigation in frastructure in a systems framework. Our results strongly suggest a signifi cant productivity effect of such investments.