Local tourism effects of HSR in small cities: three synthetic control case studies

Abstract

The inauguration of high-speed rail (HSR) services is often associated with renewed expectations of revitalization of local tourism activity in sparsely populated regions. However, the empirical literature on the actual ex-post effects of this transport mode is scarce. This paper contributes to this line of research by estimating the causal impact of the HSR on the number of visitors in three small cities located in low-density areas in Spain. Our results, using the synthetic control method, robustly show that the ex-post causal effects of the HSR on overnight visitors are insignificant and, if any, they seem to exert a negative influence rather than a positive contribution. This suggests that smaller cities should be very cautious about the short-run expected impacts of transport improvements, and policy makers and planners should be aware of the actual contribution of such investments in their assessment of the net social benefits of HSR projects.