DP6633 Urban Growth and Transportation

Author(s): Gilles Duranton, Matthew A Turner
Publication Date: January 2008
Keyword(s): instrumental variables, public transport, transportation, urban growth
JEL(s): L91, N70, R11, R49
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=6633

We estimate the effects of major roads and public transit on the growth of major cities in the US between 1980 and 2000. We find that a 10% increase in a city?s stock of roads causes about a 2% increase in its population and employment and a small decrease in its share of poor households over this 20 year period. We also find that a 10% increase in a city?s stock of large buses causes about a 0.8% population increase and a small increase in the share of poor households over this period. To estimate these effects we rely on an instrumental variables estimation which uses a 1947 plan of the interstate highway system and an 1898 map of railroads as instruments for 1980 roads.