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This paper examines the evolution of Sydney trams using network econometrics approaches. Network econometrics extends spatial econometrics by developing weight matrices based on the physical structure of the network, allowing for competing and complementary elements to have distinct effects. This research establishes a digitized database of Sydney historical tramway network, providing a complete set of geo‐referenced data of the opening and closing year and frequencies by time of day for every line. An autoregressive distributed lag model is specified and reveals that the combination of correlation strength and magnitude of lagged flow change on correlated links is a significant predictor of future tram service. The results indicate that complementary and competitive links play distinct roles in shaping the network structure. A link is more likely to undergo the same structural change highly complementary (upstream or downstream) links underwent previously, where the influence is measured by a combination of correlation strength and link importance, reflected by historical service levels.
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