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Benefits and Costs of the Erie Canal: A New View

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  • Donald F Vitaliano

    (Rensselaer Polytechnic Institute)

Abstract

Ten New York canals are evaluated as an integrated transport investment covering 1817–1880. A newly estimated willingness-to-pay (WTP) of canal users augments toll revenues as a benefits stream, and all effects are rendered in real terms. Net present value is positive for a range of real discount rates from 4 to 10 percent. A Monte Carlo simulation of uncertain WTP and discount rates shows median real net present value of US$26 million, and a zero probability of negative values. Segal is shown to have grossly overstated benefits of the Erie Canal.

Suggested Citation

  • Donald F Vitaliano, 2016. "Benefits and Costs of the Erie Canal: A New View," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 42(4), pages 581-593, September.
    • Handle: RePEc:pal:easeco:v:42:y:2016:i:4:d:10.1057_eej.2014.79
    DOI: 10.1057/eej.2014.79
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    References listed on IDEAS

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    Keywords

    Erie Canal; benefit-cost analysis;

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