In harm's way? Infrastructure investments and the persistence of coastal cities

Clare Balboni

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Coasts contain a disproportionate share of the world's population, reflecting historical advantages, but environmental change threatens a reversal of coastal fortune in the coming decades as natural disasters intensify and sea levels rise. This paper considers whether large infrastructure investments should continue to favor coastal areas. I estimate a dynamic spatial equilibrium framework using detailed geo-referenced data on road investments in Vietnam from 2000 to 2010 and find evidence that coastal favoritism has significant costs. The results highlight the importance of accounting for the dynamic effects of environmental change in deciding where to allocate infrastructure today.

Keywords: transport infrastructure; regional development; natural disaster risk; climate change; path dependence; spatial misallocation; sea level; floods; Vietnam; UKRI rights retention (search for similar items in EconPapers)
JEL-codes: J61 O18 O53 Q54 R11 R12 R13 R42 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2025-01-13
New Economics Papers: this item is included in nep-env, nep-geo, nep-sea, nep-tra, nep-tre and nep-ure
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Published in American Economic Review, 13, January, 2025, 115(1), pp. 77 – 116. ISSN: 0002-8282

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