Contribution of transportation investments to county output

The impact of highway investments on economic development is investigated. Spatial and temporal aspects of transportation investments are studied by analyzing lagged and spillover effects, and the contribution of past output levels to the current output using a dynamic model. County level data from 1990–2000, in New York/New Jersey metropolitan area is used. Results show that the spillover effects decrease with distance from the investment location, that there is a positive time lag effect between the time the investment is made and its impact on output, and that the current level of output depends heavily on past levels.