Author : Dave Donaldson
Release : 2013
Genre : Economics
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Railroads and American Economic Growth - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Railroads and American Economic Growth write by Dave Donaldson. This book was released on 2013. Railroads and American Economic Growth available in PDF, EPUB and Kindle. This paper examines the historical impact of railroads on the American economy. Expansion of the railroad network may have affected all counties directly or indirectly - an econometric challenge that arises in many empirical settings. However, the total impact on each county is captured by changes in that county's "market access," a reduced-form expression derived from general equilibrium trade theory. We measure counties' market access by constructing a network database of railroads and waterways and calculating lowest-cost county-to-county freight routes. As the railroad network expanded from 1870 to 1890, changes in market access were capitalized into county agricultural land values with an estimated elasticity of 1.1. County-level declines in market access associated with removing all railroads in 1890 are estimated to decrease the total value of US agricultural land by 64%. Feasible extensions to internal waterways or improvements in country roads would have mitigated 13% or 20% of the losses from removing railroads.