The Road Less Traveled: Economic Analysis of Roads and Highways

Abstract

Roads are an integral component of civilization, connecting people, markets, and ideas. In different settings and geographies, roads can take on many different purposes. In rural, more isolated areas, roads can serve as a cost-saving benefit and can be used as tools to increase accessibility. In urban, more congested areas, roads can be seen as an externality-producing hindrance. Naturally, given this view, the overall analysis of roads should reflect these different settings. To date, however, the study of roads in the economics literature has surprisingly large pitfalls, notably in terms of topics of study and methodologies used. Spending on roads is a non-negligible portion of government budgets across the country, making this topic relevant to study to make informed policy suggestions. This dissertation research, titled The Road Less Traveled: Economic Analysis of Roads and Highways, analyzes one overarching theme using three different perspectives: urban, political economy, and regional. Chapter 1 examines the impact of high occupancy vehicle lanes (HOV) on commuting times. The effects of HOV lanes studied from a causal perspective have been minimal in the economics literature. Knowing the impacts of these types of infrastructure projects is beneficial in terms of public policy and resource allocation. Using an instrumental variable (IV) approach to overcome the endogeneity problems associated with HOV lane location selection, this study aims to uncover the impacts of HOV lanes on commuters' time spent going to and coming home from work in California. Making use of the 2017 National Household Travel Survey, and after data pre-processing through coarsened exact matching (CEM), this paper finds that both having HOV lanes in workplace counties and living closer to HOV lanes cause increased commute times to and from work for commuters, lending credence to earlier works on road construction and traffic outcomes citing induced demand from increased road construction (Duranton and Turner, 2011). Chapter 2 studies the impact of mayoral election cycles impact the timing and location of road maintenance. Political incentives affect infrastructure construction, but how incentives affect infrastructure upkeep, like road maintenance, is sparsely documented. Previous empirical results find different conclusions than theoretical evidence about road maintenance perceptions. Political alignment and local election cycles are leveraged using difference-in-differences to investigate if political incentives cause shifts in road maintenance. Robust results identify political distortions in invasive road maintenance timing. Local election cycles, which are widespread and frequent, shift road maintenance timing. Conservative calculations suggest local US elections