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Infrastructure Costs†

Infrastructure Costs† AbstractDespite infrastructure's importance to the US economy, evidence on its cost trajectory over time is sparse. We document real spending per new mile over the history of the Interstate Highway System. We find that spending per mile increased more than threefold from the 1960s to the 1980s. This increase persists even conditional on pre-existing observable geographic cost determinants. We then provide suggestive evidence on why. Input prices explain little of the increase. Statistically, changes in income and housing prices explain about half of the increase. We find suggestive evidence that the rise of “citizen voice” in government decision-making increased spending per mile. (JEL D72, H54, N42, N72, R31, R42) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal Applied Economics American Economic Association

Infrastructure Costs†

30 pages

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Publisher
American Economic Association
Copyright
Copyright © 2023 © American Economic Association
ISSN
1945-7790
DOI
10.1257/app.20200398
Publisher site
See Article on Publisher Site

Abstract

AbstractDespite infrastructure's importance to the US economy, evidence on its cost trajectory over time is sparse. We document real spending per new mile over the history of the Interstate Highway System. We find that spending per mile increased more than threefold from the 1960s to the 1980s. This increase persists even conditional on pre-existing observable geographic cost determinants. We then provide suggestive evidence on why. Input prices explain little of the increase. Statistically, changes in income and housing prices explain about half of the increase. We find suggestive evidence that the rise of “citizen voice” in government decision-making increased spending per mile. (JEL D72, H54, N42, N72, R31, R42)

Journal

American Economic Journal Applied EconomicsAmerican Economic Association

Published: Apr 1, 2023

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