Thor Dodson

The US Interstate Highway System had a significant impact on market accessibility and transportation costs between regions. Whether this should lead to increased clustering of economic activity due to increased ‘economic centripetal forces’ or a dispersal from ‘centrifugal forces’ depends on factors that differ by industry. This paper suggests the impact depends on truck transportation utilization and input-output linkages. Utilizing travel time data constructed using GIS techniques along with BEA data on the spatial inequality of economic activity, a panel estimation is conducted to test the theory and regional variation is utilized to support the finding.

spatial distribution index

travel time matrix construction

This paper examines the relevant literatures regarding roads and the economy. This is an early draft which will cover: early economic thinkers on the subject such as Cantillon, Condillac and Steuart, Adam Smith, von Thunan, Marshall, Weber, Hotelling, Losch, Alonso, Hoover, Ohlin, Sathail, Moore and Tesch; the cost-benefit approach and how roads are valued; the production function approach; empirical strategies; modern urban economics including Fujita and Baum-Snow; the new economic geography including Krugman, Fujita, Venables, Redding and Turner; the market access literature including gravity trade models and modern GIS data implementation; as well as the representation of roads using graph theory.

Literature Tree

A spatial monopolistic competition model is constructed in the spirit of the new economic geography. Firms of different type compete over a 2-D space where transport is costly for the business of households and other firms as intermediate goods. Firms enter and exit based on profitability. A road system alters the space of transport costs and the patterns of regional activity.

model simulation