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Rural Infrastructure and Agricultural Market Integration in the United States: A long run perspective

Author

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  • Sharp, Paul

    () (Department of Business and Economics)

  • Uebele, Martin

    () (Faculty of Arts)

Abstract

In recent years, there has been an increasing focus by policymakers on rural infrastructure in the United States, including most recently tax credits to encourage investment. Previous work has documented the importance of railroad expansion for nineteenth century development, and demonstrated that policy failure led to the disintegration of agricultural markets in the interwar period, with potentially serious macroeconomic consequences. Using a database of average prices by state of seven agricultural products for the period ca. 1870-2010, we extend this analysis to the postSecond World War period. We find a striking disintegration in recent decades, as measured by price dispersion, which we attribute to decades of underinvestment, particularly in railroads. We thus provide strong support for the present policy focus on investment in rural infrastructure.

Suggested Citation

  • Sharp, Paul & Uebele, Martin, 2013. "Rural Infrastructure and Agricultural Market Integration in the United States: A long run perspective," Discussion Papers of Business and Economics 10/2013, University of Southern Denmark, Department of Business and Economics.
  • Handle: RePEc:hhs:sdueko:2013_010
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    File URL: https://www.sdu.dk/-/media/files/om_sdu/institutter/ivoe/disc_papers/disc_2013/dpbe10_2013.pdf
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    References listed on IDEAS

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    1. Wolfram Schlenker & Michael J. Roberts, 2006. "Nonlinear Effects of Weather on Corn Yields," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(3), pages 391-398.
    2. Giovanni Federico & Paul Sharp, 2013. "The cost of railroad regulation: the disintegration of American agricultural markets in the interwar period," Economic History Review, Economic History Society, vol. 66(4), pages 1017-1038, November.
    3. Uebele, Martin, 2011. "National and international market integration in the 19th century: Evidence from comovement," Explorations in Economic History, Elsevier, vol. 48(2), pages 226-242, April.
    4. MarioJ. Crucini & Mototsugu Shintani & Takayuki Tsuruga, 2010. "The Law of One Price without the Border: The Role of Distance versus Sticky Prices," Economic Journal, Royal Economic Society, vol. 120(544), pages 462-480, May.
    5. Sharp, Paul & Weisdorf, Jacob, 2013. "Globalization revisited: Market integration and the wheat trade between North America and Britain from the eighteenth century," Explorations in Economic History, Elsevier, vol. 50(1), pages 88-98.
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    Cited by:

    1. Clymer, Neil, 2015. "Aging U.S. Infrastructure," 商学討究 (Shogaku Tokyu), Otaru University of Commerce, vol. 66(1), pages 295-321.

    More about this item

    Keywords

    United States; agriculture; market integration; rural infrastructure;

    JEL classification:

    • N52 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - U.S.; Canada: 1913-
    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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