A number of research studies by and for the Federal Highway Administration's (FHWA) Office of Policy Development document the effects of public highway capital on logistics system and commercial sector economic performance. A notable example is M. Ishaq Nadili's 1996 study,' which examined the contributions of total highway capital and nonlocal highway capital to the output growth and productivity of 35 industry sectors comprising the U.S. economy. Nadiri's 1996 econometric analysis provides empirical evidence of the positive impacts of public highway capital on private sector costs of production. It also evaluates the effects of highway capital investment on the production sector's demand for labour, private capital formation, and materials. In addition, the analysis estimates the marginal commercial benefits of road system investments, calculates the net social rate of return on highway infrastructure spending, and identifies the contribution of highway capital and other economic factors to the productivity growth rate in the U.S. economy between 1950 and 1989. (A)
Abstract