Regardless of infrastructure’s significance to the US economic system, proof on its price trajectory over time is sparse. We doc actual spending per new mile over the historical past of the Interstate Freeway System. We discover that spending per mile elevated greater than threefold from the Nineteen Sixties to the Nineteen Eighties. This enhance persists even conditional on pre-existing observable geographic price determinants. We then present suggestive proof on why. Enter costs clarify little of the rise. Statistically, adjustments in revenue and housing costs clarify about half of the rise. We discover suggestive proof that the rise of “citizen voice” in authorities decision-making elevated spending per mile.
That’s from American Economic Journal: Applied Economics, by Leah Brooks and Zachary Liscow.