A time-series analysis of local highway expenditures

Abstract

The proportion of total municipal, county and township expenditures devoted to highway construction and maintenance has steadily declined since World War II. To understand the comparatively slow growth of local highway expenditures, constant percentage growth rate models were estimated using publicly available time-series data on the annual total and annual highway expenditures of all local governments in the U.S. for the period 1948–1976. To reflect the effects of changes in the national economy during this period, growth rate adjustments at 1957 and 1966 were included in these models. Excellent fits to the data were obtained. Results indicate that local governmental expenditures for highways have exhibited the same type of exponential growth function as total local governmental expenditures. However, the growth rate of local highway expenditures was less than the growth rate of total local governmental expenditures throughout the period of study. Moreover, the economic downturn of the late 1950s produced a sharper drop in the growth rate for local highway expenditures than in the growth rate for total local expenditures. Furthermore, the economic recovery in the mid-1960s resulted in a greater acceleration in the growth rate of total expenditures than in the growth rate of highway expenditures.