me 0.81 cross-section Johansson-Schipper Vehicle distance driven (vkm) Income Vehicle distance driven (passenger-km, tonne-km) 1.00 time-series The third of these results implies a time-series elasticity of paved road capital stock with respect to GDP of 0.849 - which is consistent with an elasticity with respect to GDP per capita of about 0.27. 10 It is more difficult to evaluate "investment rate" trends, as (on average) more than half of infrastructure spending is on maintenance of the existing capital stock value and the remainder is on new additions to the capital stock. Whether or not "new construction" actually augments the capital stock depends on whether the replacement investment rate is "optimal" (i.e. sufficient to maintain the capital stock value). If this is not the case, then some proportion of the "new construction" is required to replace (i.e. rebuild) existing road infrastructure that is being "worn out" (i.e. fully depreciated in accounting terms; requiring rebuilding in engineering terms). There has been INFRASTRUCTURE TO 2030: TELECOM, LAND TRANSPORT, WATER AND ELECTRICITY - ISBN 92-64-02398-4 © OECD 2006 4. KEY FACTORS DRIVING THE FUTURE DEMAND FOR SURFACE TRANSPORT INFRASTRUCTURE a noted "underinvestment" in transport infrastructure during the 1980-90s in many industrialised countries (due to public spending restraint), so that actual levels of maintenance spending may well be sub-optimal. In the absence of modelling the entire capital depreciation process, and given the relationship of actual maintenance investment to "optimal" investment, it is difficult to reliably relate "new construction" rates (or dollar values) with net additions to the road capital stock. For example (based on assumptions), the OECD trend would imply a time-series elasticity of paved road capital stock with respect to GDP of 1.95, if 100% of new construction is an augment to road capital stock. 11 In order for the elasticity of paved road capital stock with respect to GDP to be in the order of 0.84 (as above for the 