Marginal Productivity of Expanding Highway Capacity
This paper examines the contribution of highway capacity expansions towards regional economic development in the US. Using data for the forty-eight contiguous US states from 1984 to 2005, the dynamic production function estimates reveal that increases in overall highway capacity in states can have a positive, long-lasting effect on private sector output. However, both short-run and long-run output elasticities of highways are small. The data suggests further investments in highway infrastructure may not produce sizable economic returns. The estimates of the long-term productivity benefits of capacity expansion appear to be even smaller for lane-mile additions of lower functional road categories. © 2012 LSE and the University of Bath
Volume (Year): 46 (2012)
Issue (Month): 3 (September)
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