ECONOMIC EFFECTS OF HIGHWAYS

Stimulating economic growth and development in rural and economically lagging regions is the goal of several federal and state highway programs. This study examines the effectiveness of highway investment as an economic development tool. The results show that the beneficiaries of the interestate links in terms of economic growth are interstate counties in close proximity to large cities or having some degree of prior urbanization, such as a city with more than 25,000 residents. Rural interstate and off-interstate counties exhibit few positive effects.

Sources:

Rephann, Terance and Andrew Isserman. 1994. New highways as economic development tools: An evaluation using quasi-experimental matching methods. Regional Science and Urban Economics 24: 723-751.

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