We use county and individual-level data from 1850 and 1860 to examine the economic impact of gaining access to a railroad. Previous studies have found that rail access was positively correlated with the value of agricultural land at a point in time, and have interpreted this correlation as evidence that rail access chiefly benefitted agricultural land owners in the manner predicted by the Hekscher-Ohlin or Von Theunen models. We use a difference-in-difference strategy, comparing changes in outcomes in counties that gained rail access in the 1850s to those that either gained access earlier or did not have access before the Civil War. Most of the estimated effects are small and the signs are not wholly consistent with either model, under the null hypothesis that agriculture was the chief beneficiary of rail access. For example, we find that rail access appears to have increased urbanization, raised the likelihood of participation in the service sector, decreased agricultural yields, and reduced the share of improved acreage in total land area, opposite to the patterns predicted by either the Heckscher-Ohlin or Von Theunen models.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
12381.
Length: Date of creation: Jul 2006 Date of revision: Handle: RePEc:nbr:nberwo:12381
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Find related papers by JEL classification: N51 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - U.S.; Canada: Pre-1913 N71 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: Pre-1913
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