American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Infrastructure Costs
American Economic Journal: Applied Economics
vol. 15,
no. 2, April 2023
(pp. 1–30)
Abstract
Despite 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.Citation
Brooks, Leah, and Zachary Liscow. 2023. "Infrastructure Costs." American Economic Journal: Applied Economics, 15 (2): 1–30. DOI: 10.1257/app.20200398Additional Materials
JEL Classification
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H54 National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock
- N42 Economic History: Government, War, Law, International Relations, and Regulation: U.S.; Canada: 1913-
- N72 Economic History: Transport, Trade, Energy, Technology, and Other Services: U.S.; Canada: 1913-
- R31 Housing Supply and Markets
- R42 Transportation Economics: Government and Private Investment Analysis; Road Maintenance, Transportation Planning
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