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Did Railroads Induce Or Follow Economic Growth? Urbanization And Population Growth In The American Midwest, 1850-60

  • Jeremy Atack

    ()

    (Department of Economics, Vanderbilt University)

  • Fred Bateman

    ()

    (University of Georgia, Department of Economics)

  • Michael Haines

    ()

    (Colgate University, Department of Economics)

  • Robert A. Margo

    ()

    (Boston University, Department of Economics)

For generations of scholars and observers, the "transportation revolution," especially the railroad, has loomed large as a dominant factor in the settlement and development of the United States in the nineteenth century. There has, however, been considerable debate as to whether transportation improvements led economic development or simply followed. Using a newly developed GIS transportation database we examine this issue in the context of the American Midwest, focusing on two indicators of broader economic change, population density and the fraction of population living in urban areas. Our difference in differences estimates (supported by IV robustness checks) strongly suggest that the coming of the railroad had little or no impact upon population densities just as Albert Fishlow concluded some 40 years ago. BUT, our results also imply that the railroad was the "cause" of midwestern urbanization, accounting for more than half of the increase in the fraction of population living in urban areas during the 1850s.

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File URL: http://www.bu.edu/econ/ied/dp/papers/dp%20178IED_Midwest_RR.pdf
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Paper provided by Boston University - Department of Economics in its series Boston University - Department of Economics - The Institute for Economic Development Working Papers Series with number dp-178.

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Length: 32
Date of creation: Jan 2009
Date of revision:
Publication status: forthcoming, SOCIAL SCIENCE HISTORY
Handle: RePEc:bos:iedwpr:dp-178
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  1. Craig, Lee A & Palmquist, Raymond B & Weiss, Thomas, 1998. "Transportation Improvements and Land Values in the Antebellum United States: A Hedonic Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 16(2), pages 173-89, March.
  2. The Conference on Research in Income and Wealth, 1960. "Trends in the American Economy in the Nineteenth Century," NBER Books, National Bureau of Economic Research, Inc, number unkn60-1, 07.
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