Urban Road-Building Linked to Poor Statewide Economic Performance

David Eppstein / Wikimedia Commons
Shane Phillips's picture
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University of Minnesota professor David Levinson has written in the past that, because of the relative completeness of our national highway network and the cost of construction, the return on investment for additional mileage is approaching zero. One study estimates the return on investment for highway construction was just 14% between 1990 and 2000.

I recently decided to follow up on this line of research, so I dug through some Census data. What I found was shocking, though not altogether surprising. It seems that, besides wasting billions of taxpayer dollars, road-building may actually be holding back economic growth overall: from roughly 2000 to 2010, states that built the fewest urban road miles grew an average of 64 to 94 percent faster than their asphalt-enamored neighbors. Rather than increasing productivity through increased mobility and reduced congestion, as politicians and lobbyists so often promise, all this mindless road-building could be depressing statewide economic growth!

Between 1998 and 2009 the United States accumulated 144,425 additional miles of roadway — 239,728 miles of new urban roads, offset by the loss of 95,303 miles of rural roads. Over roughly the same time frame (2000-2010, the years for which data was readily available), the US saw an 8.15% increase in per-capita income. Official statistical abstracts also break this data down state by state: [Roads, 1998] - [Roads, 2009] - [Income, 2000-2010]. (Scroll to the bottom to find a table with relevant data for each state. I also have an Excel file with additional data; readers interested in a more complete data-set can request this via email or Twitter.)

The statistics at the state level vary widely for both road-building and income growth:

  • Changes in urban road mileage ranged from -0.45% (Alabama) to +68.21% (West Virginia);
  • Changes in per-capita income ranged from -3.53% (Nevada) to +41.78% (Washington, DC).

Looking at the numbers in aggregate, we see some interesting trends that seem to hold up just about any way you slice the pie:

  • States that increased their urban road mileage by less than 30% grew by an average of 14.40%, while those that increased mileage by greater than 30% grew by an average of just 8.77%.
  • If we set the cutoff at 20% mileage growth, states that built less grew by 17.97%, and states that built more grew by 9.24%.
  • At a 10% cutoff, states that built less grew by an impressive 20.70%, compared to just 10.66% for those that built more.

Statistically, analyzing the correlation between road-building and economic growth gives us an r-score (correlation coefficient) of -0.34, which implies that about 10% of a given state's economic growth can be explained by how much urban road-building they did over this time period. Many things influence the overall health of any economy, obviously, so we shouldn't expect the quantity of roads to wholly predict statewide economic growth by itself, but this does indicate a negative correlation between the two variables: more roads equals less growth. (As always, please remember that correlation does not imply causation.)

Here's a graph of road-building versus economic growth, complete with the down-sloping trend line:

None of this should be particularly surprising. While politicians and advocates love to tout the job-creating value of new road and highway capacity, congestion reduction rarely lasts more than five years and widened roads ultimately only succeed in extending the boundaries of wasteful, unproductive sprawl. In the case of road widenings, it's entirely possible that the disruption caused during the construction phase completely erases — or even exceeds — the fleeting benefits of reduced congestion. 

Then there's the opportunity cost: think of all the good that could have been done with the hundreds of billions of dollars spent on roadways over that period: more responsible transportation spending, education, renewable energy ... take your pick.

Washington, DC, which grew its urban road network by just 5.91% over this 11-year period but managed a best-in-class 41.78% growth rate, doesn't have to imagine.


Table: Changes in urban roadway mileage and per-capita income, by state:

State Change in urban roadway mileage % change Change in per-capita income % change
Alabama -94 -0.45% 3,739 13.95%
Alaska 609 33.65% 5,747 16.90%
Arizona 5,599 32.33% 2,245 7.67%
Arkansas 2,857 28.60% 4,686 18.63%
California 6,508 7.79% 1,590 4.28%
Colorado 5,375 38.39% 674 1.78%
Connecticut 3,420 29.13% 3,705 7.93%
Delaware 1,009 50.86% 1,426 4.13%
District of Columbia 84 5.91% 18,842 41.78%
Florida 32,704 67.66% 2,952 9.11%
Georgia 11,238 41.06% 159 0.50%
Hawaii 445 23.75% 4,536 14.01%
Idaho 1,828 46.69% 1,536 5.59%
Illinois 5,528 15.40% 2,489 6.85%
Indiana 6,919 34.84% 860 2.81%
Iowa 1,891 19.98% 4,050 13.32%
Kansas 2,852 28.29% 4,042 12.74%
Kentucky 1,560 14.15% 2,403 8.70%
Louisiana 2,410 17.30% 8,346 31.79%
Maine 367 13.96% 3,832 12.89%
Maryland 3,154 22.16% 5,490 14.21%
Massachusetts 5,136 22.27% 3,833 9.01%
Michigan 6,123 20.59% -703 -2.15%
Minnesota 5,055 32.10% 2,248 6.19%
Mississippi 3,102 39.15% 4,056 16.90%
Missouri 7,225 44.14% 2,212 7.12%
Montana 590 23.74% 5,641 21.58%
Nebraska 1,282 24.98% 3,745 11.76%
Nevada 1,590 27.93% -1,219 -3.53%
New Hampshire 1,998 68.19% 1,705 4.49%
New Jersey 7,345 30.34% 2,632 6.11%
New Mexico 1,848 30.07% 5,110 20.16%
New York 7,607 18.63% 5,363 13.90%
North Carolina 12,777 55.34% 980 3.15%
North Dakota 64 3.49% 7,993 28.00%
Ohio 11,318 33.82% 792 2.48%
Oklahoma 5,616 42.68% 5,370 19.60%
Oregon 2,205 20.63% 1,396 4.36%
Pennsylvania 11,164 32.70% 3,496 10.42%
Rhode Island 484 10.29% 5,478 16.68%
South Carolina 5,814 54.81% 1,908 6.83%
South Dakota 1,007 50.88% 5,540 18.82%
Tennessee 6,067 34.49% 2,044 6.88%
Texas 14,831 18.02% 3,792 11.94%
Utah 3,898 53.78% 2,025 7.42%
Vermont 53 3.87% 4,861 15.48%
Virginia 4,967 26.38% 5,041 14.30%
Washington 5,538 31.37% 3,108 8.61%
West Virginia 2,176 68.21% 4,676 18.93%
Wisconsin 6,149 37.88% 2,130 6.56%
Wyoming 436 19.15% 10,448 32.04%

Shane is a Masters student at the University of Southern California and an advocate for cities where cars are optional, housing is affordable, and residents are safe and healthy. Follow him on Twitter at @shanedphillips.

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