Does public infrastructure affect economic activity? Evidence from the rural interstate highway system

Regional Science and Urban Economics 2000 Amitabh Chandra and Eric Thompson We examine the relationship between large infrastructure spending, of the types implied by interstate highway construction, and the level of economic activity. By collecting historical data on interstate highway construction and economic activity in the United States at the county level we find that highways have a differential impact across industries: certain industries grow as a result of reduced transportation costs; whereas others shrink as economic activity relocates. Additionally, we find that highways affect the spatial allocation of economic activity. They raise the level of economic activity in the counties that they pass directly through, but draw activity away from adjacent counties.

Publication Information

Researcher Information

	Thompson, Eric Associate Professor of Economics Director of the Bureau of Business Research Economics CBA 347 P.O. Box 880489 University of Nebraska-Lincoln Lincoln, NE 68588-0489, USA Phone: (402) 472-3318 Fax: (402) 472-9700 ethompson2@unl.edu	Thompson, Eric	Economics