Surface Transportation and Regional Output : A Spatial Panel Approach

This paper studies regional impact of three mature surface transportation infrastructures in the northeast corridor of the US: highways, public railways and public transit. Infrastructure stock is valued in real terms from 1991 to 2009. A spatial panel approach with fixed effects is adopted to test the hypothesis of spillovers by allowing for spatial heterogeneity. The result shows that surface transportation infrastructure in general does have a significant impact on regional output, most of which is from spillover effect; highways have an overwhelming influence through both local effects and spillover effects. The impacts from public railways and transit are not significant, but transit does show a positive though small spillover effect