Residential sorting by education level enhances the return on investments in transport infrastructure

Concerns are often raised about increasing spatial segregation by education level in societies. This column uses a study in the Netherlands to show that as preferences for locally provided public goods with a high fixed cost, such as train stations, differ widely between educational groups, spatial sorting by education and an increase in local density can actually raise the social benefits from investments in such infrastructure. However, since the highly educated benefit disproportionally, this leads to serious political economy problems.