The impact of changing bus rapid transport (BRT) system lanes on the spatial distribution of economic activity within the Jakarta metropolitan area

The development of the Bus Rapid Transport (BRT) system in Jakarta is assumed to give an influence on the spatial distribution of economic activity within the Jakarta Metropolitan Area. But, what kind of impact will it bring in the future? And what are the impacts of changing the sequences of the project development and the value of parameters on the economic activity in this area? These questions, in this research, are answered using the theory of geographic economics and the computer simulation developed by Brakman, Garretsen, and Van Marrewijk (2001). In order to analyze the hysteresis of the BRT project, together with the impact of this development on the final distribution of economic activity, the long run equilibrium before and after the development of the project are calculated using several different scenarios of distances. Following these simulations, other simulations are done in order to observe the impact of changing the value of congestion cost, transport cost, elasticity of substitution, and share of income spent in manufacture parameters. Ultimately, there are several conclusions that are drawn from this research. First, it can be concluded that hysteresis does not play an important role in determining the final distribution of mobile activity after the development of the first three corridors and the completion of the entire project. Second, the development of the project benefits Jakarta by allowing this city to attract a larger share of mobile activity. In the future, the BRT corridors will act as forces that counteract the decline of the economic activity in Jakarta due to the high congestion cost. The decline of economic activity will occur less rapidly than what it otherwise would have been done in a relative time. Third, it is important to consider the impact of the BRT project on the welfare level of people living in the Jakarta Metropolitan Area. It is clear that the development of this project increases the welfare level of both mobile and immobile workers in all the twelve regions. It is an investment in infrastructure, and thus increases the interaction between the regions. The mobile workers gain from the reduction of the transport cost and the growth of interaction between regions. The immobile workers in the centre of the Jakarta Metropolitan Area benefit, because the increase of mobile economic activity in their regions reduces their import over some goods. The immobile workers in the outskirt of Jakarta also gain, because the goods that have to be imported from the centre can now be imported with the lower cost.