Infrastructure Investment and Rural Economic Development: An Evaluation of USDA's Broadband Loan Program

We empirically evaluate whether participation in the U.S. Department of Agriculture's Broadband Loan Program, which began making loans in 2002, has had measurable positive impacts on zip code-level economic outcomes. Using difference in differences and propensity score matching program evaluation techniques, we find that loans made in 2002 and 2003 under the Pilot Broadband Loan Program have had a substantial positive impact on employment, annual payroll, and the number of business establishments in recipient communities. However, a more spatially disaggregated analysis reveals that the positive economic impacts of the pilot program are driven primarily by the outcomes in communities located closest to urban areas. Finally, we find no evidence that loans received as part of the current Broadband Loan Program have had a measurable positive impact on recipient communities, possibly because not enough time has elapsed for the impacts of the current Broadband Loan Program to have emerged. Copyright (c) 2010 Copyright the Authors. Journal compilation (c) 2010 Wiley Periodicals, Inc..