The Basic Service Quality Level of Transport Infrastructure in Peripheral Areas

The provision of transport infrastructure outside the most populated regions in Finland has been under budgetary pressure for more than decade. Many of these less populated areas suffer a decline of the population, which adds to the stress on these regional economies. The prolonged reduction in maintenance starts to show on the local roads and secondary railroad connections, which in turn may necessitate the reduction of speeds or axle load limits. In the year 2002 the Ministry of Transport and Communication commissioned a study in which the various constituent elements for specifying an infrastructure (minimum) service level are discussed. In addition the study indicated the problems and trade-offs when bringing these elements together in a compound evaluation of a (minimum) service level. The constituent elements are very diverse, comprising technical and regulatory aspects of road and rail transport, social aspects, and economic aspects such accessibility of product and labour markets. The present paper summarises the discussion on these elements. In addition it illustrates to what extent housing and transport costs are mutually compensating when comparing households in the countryside with urban households. The observed cost differences are in accordance with the theory, but the income gap seems to be decisive with respect to migration from the countryside to the cities. The illustration is based on micro-data from the years 1985?2001.