The Economic Perspective: “Benefits of Highway Construction”

I’m Mary Walden, with economist MW, welcoming you to the economic perspective.  Today’s program looks at the benefits of highway construction. Mike, it’s obvious that the economic lives of most people and companies depends on roads.  Roads allow us to work, school, and places for shopping and entertainment.  Businesses rely on roads to deliver their products to buyers.  Can we put a monetary amount on the value of roads?

 

Mike: Summary Answer

  1. Easier said than done, but attempted by researchers at NBER
  2. Looked at 7000 road connections between 900 cities and estimated the benefits and costs of adding another 10 lane miles on each link
  3. Measured benefit in terms of faster travel, less congestion, and ability to deliver people and goods
  4. First, cost varied depending on land costs – varied from $2 million to $6 million for 10 lane miles
  5. But in all cases, benefits were much higher – averaged between $10 million and $20 million per 10 lane miles, but up to $700 million areas around NYC
  6. Bottom line – building more roads is a big new plus – question – how to fund them
  7. I’m MW

 

Mary:  And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.