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Highways and Economic Productivity: Interpreting Recent Evidence

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  • Boarnet, Marlon G.

Abstract

This paper reviews the recent literature on public infrastructure and economic productivity, with special attention to the particular case of highway infrastructure. Recent evidence suggests that, at the margin, highway infrastructure contributes little to state or national productivity. This is consistent with studies that show relatively small land use impacts from modern highways. Yet the idea that highways enhance economic health is common in the policy and planning communities. Two explanations can help reconcile this divergence between academic research and popular perception. First, some of the economic development observed near highways might not actually be caused by the highway. Second, some of the economic development near highways might be a shift of economic activity away from other areas. Either explanation suggests the need for reforms in highway project analysis and funding. Appropriate policy reforms and directions for future research are suggested.

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Bibliographic Info

Paper provided by University of California Transportation Center in its series University of California Transportation Center, Working Papers with number qt4g79984s.

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Date of creation: 01 Oct 1995
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Handle: RePEc:cdl:uctcwp:qt4g79984s

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Keywords: Social and Behavioral Sciences;

References

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  1. Rephann, Terance & Isserman, Andrew, 1994. "New highways as economic development tools: An evaluation using quasi-experimental matching methods," Regional Science and Urban Economics, Elsevier, vol. 24(6), pages 723-751, December.
  2. Douglas Holtz-Eakin & Amy Schwartz, 1995. "Spatial productivity spillovers from public infrastructure: Evidence from state highways," International Tax and Public Finance, Springer, vol. 2(3), pages 459-468, October.
  3. Douglas Holtz-Eakin & Amy Ellen Schwartz, 1995. "Spatial Productivity Spillovers from Public Infrastructure: Evidence from State Highways," NBER Working Papers 5004, National Bureau of Economic Research, Inc.
  4. Holtz-Eakin, Douglas & Schwartz, Amy Ellen, 1995. "Infrastructure in a structural model of economic growth," Regional Science and Urban Economics, Elsevier, vol. 25(2), pages 131-151, April.
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  6. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
  7. Garcia-Mila, Teresa & McGuire, Therese J., 1992. "The contribution of publicly provided inputs to states' economies," Regional Science and Urban Economics, Elsevier, vol. 22(2), pages 229-241, June.
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  9. Kessides, C., 1993. "The Contributions of Infrastructure to Economic Development, A review of Experience and Policy Implications," World Bank - Discussion Papers 213, World Bank.
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  11. Kevin T. Duffy-Deno & Randall W. Eberts, 1989. "Public infrastructure and regional economic development: a simultaneous equations approach," Working Paper 8909, Federal Reserve Bank of Cleveland.
  12. Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-96, September.
  13. Small, Kenneth A., 1993. "Congestion Pricing: New Life for an Old Idea?," University of California Transportation Center, Working Papers qt4fv3116k, University of California Transportation Center.
  14. Randall W. Eberts & Michael S. Fogerty, 1987. "Estimating the relationship between local, public and private investment," Working Paper 8703, Federal Reserve Bank of Cleveland.
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  16. White, Michelle J., 1976. "Firm suburbanization and urban subcenters," Journal of Urban Economics, Elsevier, vol. 3(4), pages 323-343, October.
  17. John A. Tatom, 1991. "Public capital and private sector performance," Review, Federal Reserve Bank of St. Louis, issue May, pages 3-15.
  18. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
  19. Randall W. Eberts, 1986. "Estimating the contribution of urban public infrastructure to regional growth," Working Paper 8610, Federal Reserve Bank of Cleveland.
  20. Small, Kenneth A., 1983. "The incidence of congestion tolls on urban highways," Journal of Urban Economics, Elsevier, vol. 13(1), pages 90-111, January.
  21. Robert Eisner, 1991. "Infrastructure and regional economic performance: comment," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 47-58.
  22. Clifford M. Winston, 1990. "How efficient is current infrastructure spending and pricing?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 34, pages 183-222.
  23. Yinger John, 1993. "Around the Block: Urban Models with a Street Grid," Journal of Urban Economics, Elsevier, vol. 33(3), pages 305-330, May.
  24. Griliches, Zvi, 1988. "Productivity Puzzles and R&D: Another Nonexplanation," Journal of Economic Perspectives, American Economic Association, vol. 2(4), pages 9-21, Fall.
  25. Wieand, Kenneth F., 1987. "An extension of the monocentric urban spatial equilibrium model to a multicenter setting: The case of the two-center city," Journal of Urban Economics, Elsevier, vol. 21(3), pages 259-271, May.
  26. Holtz-Eakin, Douglas, 1993. "State-specific estimates of state and local government capital," Regional Science and Urban Economics, Elsevier, vol. 23(2), pages 185-209, April.
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Cited by:
  1. Konstantina Gkritza & Kumares Sinha & Samuel Labi & Fred Mannering, 2008. "Influence of highway construction projects on economic development: an empirical assessment," The Annals of Regional Science, Springer, vol. 42(3), pages 545-563, September.
  2. Luoto, Jani, 2011. "Aggregate infrastructure capital stock and long-run growth: Evidence from Finnish data," Journal of Development Economics, Elsevier, vol. 94(2), pages 181-191, March.

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