Abstract
This paper presents an analysis of an important component of the benefits of Federal-aid highway infrastructure investments in the United States. Specifically, it focuses on the effects of those investments since 1950 on costs and productivity of firms in the U.S. road freight transport industry. Using a theoretical and statistical model of regional truck firm costs, the paper documents that the rapid growth of highway infrastructure which occured between 1950 and 1973 had a strong and positive effect on productivity growth in trucking. Furthermore, the results indicate the benefits of these investments to be substantial — large enough to justify between one-third and one-half of the cost of the Federal-aid highway system over this period on the basis of benefits to trucking alone.
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