RAILROADS AND GROWTH IN PRUSSIA

Erik Hornung

Journal of the European Economic Association, 2015, vol. 13, issue 4, 699-736

Abstract: We study the effect of railroad access on urban population growth. Using GIS techniques, we match triennial population data for roughly 1,000 cities in 19th-century Prussia to georeferenced maps of the German railroad network. We find positive short- and long-term effects of having a station on urban growth for different periods during 1840–1871. Causal effects of (potentially endogenous) railroad access on city growth are identified using propensity score matching, instrumental variables, and fixed-effects estimation techniques. Our instrument identifies exogenous variation in railroad access by constructing straight-line corridors between nodes. Counterfactual models using pre-railroad growth yield no evidence to support the hypothesis that railroads appeared as a consequence of a previous growth spurt.

Date: 2015
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Working Paper: Railroads and Growth in Prussia (2014)
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