HIGHWAY INVESTMENT AND THE NATIONAL ECONOMY

Analyses conducted by the FHWA have estimated empirical relationships between levels of highway expenditures; the condition of the nation's highways; and highway users' speeds, operating costs, and fuel consumption. In this paper these analyses are extended to explain and quantify the impacts of deterioration of highway performance on (a) the macroeconomic behavior of the U.S. economy and (b) specific industry sectors. The estimated macroeconomic and interindustry impacts are consequences of departures from a base-case, multiyear program of highway expenditures that, by 1995, would restore the physical and operating characteristics of highways to what they were in 1978. Against this base case, this study estimates the consequences of a program of much lower highway expenditures that corresponds closely to FHWA's projections to 1995. The movement from the 1978 service level base case to the low-investment scenario is described in terms of lower highway expenditures and taxes and estimated resultant changes in industrial productivity, motor vehicle depreciation, and highway use. The base case and low-investment scenario are then simulated and compared by a longterm macroeconomic model and by a dynamic input-output model. The macroeconomic impacts are higher prices and lower levels of production, employment, disposable income, consumption, saving, and productivity. Projected impacts on particular industries are diverse. The most adversely affected sectors are for-hire trucking and highway construction firms and their suppliers. Several consumer-oriented industries are also projected to decline because of the weakened state of the overall economy. Several industries closely related to highway use are expected to experience growth in output. These include truck, bus, and trailer bodies; metal stampings; tires; petroleum refining; motor vehicles; and crude petroleum.

• Record URL:
  http://onlinepubs.trb.org/Onlinepubs/trr/1984/984/984-007.pdf
• Summary URL:
  https://scholar.google.com/scholar_lookup?title=HIGHWAY+INVESTMENT+AND+THE+NATIONAL+ECONOMY&author=S.+Butler&author=W.+Gazda&author=R.+Horn&author=R.+Smith&author=H.+Ismail&author=A.+Webster&publication_year=1984
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• Supplemental Notes:
  • Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved. Publication of this paper sponsored by Committee on Application of Economic Analysis to Transportation Problems.
• Authors:
  • Butler, Stewart E
  • Gazda, Walter E
  • Horn, Richard J
  • Smith, Rene T
  • Ismail, Hilmy
  • Webster, Arthur L
• Publication Date: 1984

Media Info

• Media Type: Print
• Features: References; Tables;
• Pagination: pp 42-51
• Monograph Title: Economic analysis of transportation investments and economic development
• Serial:
  • Transportation Research Record
  • Issue Number: 984
  • Publisher: Transportation Research Board
  • ISSN: 0361-1981

Subject/Index Terms

• TRT Terms: Deterioration; Economic impacts; Economics; Employment; Evaluation; Expenditures; Fuel consumption; Highway planning; Investments; Macroeconomics; Motor vehicles; Operating costs; Pavements; Productivity; Speed; Traffic speed; Transportation
• Uncontrolled Terms: Pavement conditions
• Subject Areas: Economics; Pavements; Society; Transportation (General); I10: Economics and Administration;

Filing Info

• Accession Number: 00399870
• Record Type: Publication
• ISBN: 0309037689
• Files: TRIS, TRB
• Created Date: Feb 28 1986 12:00AM