How effective are policies aimed at integrating isolated regions? We answer this question in the context of a highway system in one of the poorest regions in the United States. With construction ...starting in 1965, the Appalachian Development Highway System (ADHS) ultimately consisted of over 2,500 high-grade road miles. We use a simple model of interregional trade to motivate our empirical analysis, which quantifies the relationship between market access and income. We then calibrate the model to evaluate the aggregate impact of the ADHS and compare this with alternative counterfactual proposals. We find that removing the ADHS would have reduced total income by $53.7 billion in the United States, with $22 billion of the losses in Appalachian counties. Our findings highlight the potential aggregate benefits of transportation infrastructure policies and suggest that leakage outside the targeted area may be substantial.
HIGHWAYS AND GLOBALIZATION Jaworski, Taylor; Kitchens, Carl; Nigai, Sergey
International economic review (Philadelphia),
11/2023, Letnik:
64, Številka:
4
Journal Article
Recenzirano
Odprti dostop
Abstract
This article quantifies the value of U.S. highways. We develop a multisector general equilibrium model with many locations in the United States (i.e., counties) and many countries. In the ...model, producers choose shipping routes subject to domestic and international trade costs, endogenous congestion, and port efficiency at international transshipment points. Applying the model, we find that removing the Interstate Highway System reduces real GDP by $421–$578 billion. The results highlight the gains from intersectoral and international trade as well as the role of domestic transportation infrastructure in shaping regional comparative advantage.
Abstract
Using variation in crop prices induced by large swings in demand surrounding World War I, we examine the fertility response to crop revenue increases from 1910 to 1930. Our estimates ...indicate that agricultural price increases reduced fertility, explaining about 9% of the overall decline in fertility over the period. The effect persists years after the collapse of the war boom. Importantly, we show that fertility declines were concentrated in farm women and fertility declined along intensive and extensive margins. Combined, the pattern of estimates is consistent with agricultural women experiencing an increase in the opportunity cost of their time.
To isolate the impact of access to electricity on local economies, we examine the impact of the Rural Electrification Administration low-interest loans in the 1930s. The REA provided loans to ...cooperatives to lay distribution lines to farms and aid in wiring homes. Consequently, the number of rural farm homes electrified doubled in the United States within five years. We develop a panel data set for the 1930s and use changes within counties over time to identify the effect of the REA loans on a wide range of socio-economic measures. The REA loans contributed significantly to increases in crop output and crop productivity and helped stave off declines in overall farm output, productivity, and land values, but they had much smaller effects on nonagricultural parts of the economy. The ex-ante subsidy from the low-interest loans was large, but after the program was completed, nearly all of the loans were fully repaid, and the ultimate cost to the taxpayer was relatively low.
I study the impacts of one of the largest regional development projects in American History, the Tennessee Valley Authority (TVA), on a variety of economic outcomes. The TVA has been noted as an ...example of how to develop a region's water power potential to stimulate growth. In what follows, I show using a county-level panel dataset, that the TVA had little impact on economic growth in the South. I attribute these results to the institutional history of the TVA and the contractual agreements it signed in an effort to expand its service territory. “…as a pebble dropped in a pond causes ripples to flow outward to the surrounding shores, the influence of TVA'slow rates flows outward to surrounding areas…”
TVA's Influence on Electric Rates 1965
The 1984 federal Comprehensive Crime Control Act (CCCA) included a provision that permitted local law enforcement agencies to acquire up to 80% of the proceeds derived from civil asset forfeitures ...obtained in joint operations with federal authorities. We investigate how this rule governing forfeited assets influenced crime and police incentives by taking advantage of pre‐existing differences in state‐level civil asset forfeiture law and the timing of the CCCA. We find that after the CCCA was enacted crime fell about 17% in places where the federal law allowed police to retain more of their seized assets than state law previously allowed. (JEL K42, K15, H76)
Eminent domain gives public agencies the right to acquire property from private individuals in exchange for just compensation. Following Kelo vs. New London 2005, the powers of eminent domain were ...extended, opening the door for potential abuses of power by government officials. In this paper, I empirically investigate the use of eminent domain using newly digitized records from the Tennessee Valley Authority (TVA), which extensively used eminent domain to construct dams in the 1930s. Using a sample of families living in one reservoir location, I find empirical evidence that land tenure, the number of property holdings, and debt levels affected the holdout decision, suggesting that holdouts are individuals with high subjective values. I then develop a screening model with asymmetric information in seller valuations to predict when eminent domain will be used and what settlement values and court awards would be. I test the model's and find that individuals who held out increased their property value by about 5 %, and incentives to holdout existed only for individuals who received initially low settlement proposals.
Between the 2009–2010 and 2010–2011 seasons, the National Football League (NFL) repositioned one of its officials in order to prevent injuries among officials. This creates a quasi‐experiment for ...studying how a change in the extent of policing affects detection of offenses. Using play‐by‐play data from the 2009–2010 and 2010–2011 NFL season, I estimate how the detection of offensive holding changes when the positioning of an official changes. I find that there is approximately a 20 increase in the number of offensive holding penalties called after the NFL repositioned the official. Penalties called on defensive linemen fell as a result of the repositioning. Overall, there was no change in the total number of penalties called. Using the estimated change in the probability of a penalty, I estimate the probability of an official calling a penalty. I infer that NFL officials detect approximately 60% of crimes committed on the field. (JEL K4, Z0, D0)
Firms engaging in hiring face recruitment costs. To reduce these costs, firms concentrate their efforts in locations that are perceived as talent rich or have produced successful employees in the ...past. Such recruitment mechanisms may lead to statistical discrimination if they reduce uncertainty for a subset of candidates or if firms relate current employee attributes with the institution. In this article, I test for statistical discrimination associated with an individual's institutional affiliation that results from targeted hiring practices by using a unique individual‐level data set of National Football League (NFL) draft prospects. I find that conditional on individual ability, individuals from highly ranked college teams are drafted earlier than individuals from lower ranked institutions. Over the length of a player's professional career, a player's college institution has no effect on career success, indicating that certain players are damaged by this recruitment mechanism. Even though players can suffer substantial financial damages as a result of being drafted later in the draft, NFL team performance is not sufficiently affected for teams to exploit this bias. (JEL J71, J31)
Dealing with eminent domain Kitchens, Carl; Roomets, Alex
Journal of behavioral and experimental economics,
02/2015, Letnik:
54
Journal Article
Recenzirano
•We adapt Moresi, Salop, and Sarafidis, 2008 sequential-Nash-bargaining model to the case of land assembly with eminent domain and contingent contracting.•We test the predictions of this model in a ...laboratory setting.•We find the model does well in modeling subject behavior in the case of eminent domain.•We find the model does a poor job in modeling subject behavior in the case of contingent contracting.
In light of the U.S. Supreme Court’s recent decision, Kelo vs. New London, there has been a renewed interest in problems dealing with the acquisition of perfectly-complementary inputs, specifically in the context of land assembly and eminent domain. Using a sequential-Nash-bargaining model we examine a scenario where a buyer can purchase N identical properties from N queued sellers. We examine the scenario with respect to two bargaining processes, (i) where each contingent price must be agreed upon by buyer and seller, (ii) where the buyer has an additional option to execute a transaction at a predetermined price for a fee. Using the first mechanism, theory predicts, given equal bargaining weights, that sellers who are later in the queue will receive lower prices. Using the second mechanism, theory predicts that prices should be equal when sellers have equal bargaining weight. We experimentally test these predictions and find evidence that welfare is maximized in both treatments, and that price predictions in the second protocol align with the theory.
PDF
