Alternative Transportation Expenditures in Development Strategy: Arterial Highways Versus Local Roads

F Thomas Ayers Jr,Lewis Freiberg Jr

doi:10.52324/001c.10377

Abstract

This paper examines the impact of Interstate 64 (I-64) on land values in five rural hut diverse counties in Eastern Kentucky. Since the corridor of I-64 examined is hounded on the West by Lexington, Kentucky and on the East by Ashland, Kentucky and Huntington, West Virginia, it is possible to test Haig’s theory of location and the extent to which I-64 has promoted economic development within the corridor.

Highlights

The effect of transportation upon land values has long been a subject of interest to economists and regional planners
Distance to [1-64], Xe, enters the equations only in Clark County, which is contiguous to the Lexington Metropolitan area, and in Carter County, which is contiguous to the Ashland-Huntington metropolitan area
The fundamental implication of our analysis is that arterial highways may well he necessary, but are far from a sufficient, generator of eco nomic development

Summary

Introduction

The effect of transportation upon land values has long been a subject of interest to economists and regional planners. For metropobtan areas a general improvement in transporta tion wiU lower transportation cost and allow firms and households to move from the economic center of the area, where site rents are relative ly high, to the periphery, where site rents are lower This shifting of the demand for sites to outlying rural areas, will cause site rents (,land values) to increase in these areas relative to the economic center. As Wilson has pointed out, the idea that transportation facilitates economic activity is an old concept In his seminal work, Hirschman has suggested that improvement in the infrastructure of a region (including highways )may increase the rate of economic growth. Since the cor ridor of [1-64] examined is hounded on the West by Lexington, Kentucky and on the East by Ashland, Kentucky and Huntington, West Virginia, it is possible to test Haig's theory of location and the extent to which [1-64] has promoted economic development within the corridor

Data and Model

Empirical Results

Montgomery Cotmty

Conclusions