Railroads and Local Economic Development: The United States in the 1850s

Michael R. Haines and Robert Margo

No 12381, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use county and individual-level data from 1850 and 1860 to examine the economic impact of gaining access to a railroad. Previous studies have found that rail access was positively correlated with the value of agricultural land at a point in time, and have interpreted this correlation as evidence that rail access chiefly benefitted agricultural land owners in the manner predicted by the Hekscher-Ohlin or Von Theunen models. We use a difference-in-difference strategy, comparing changes in outcomes in counties that gained rail access in the 1850s to those that either gained access earlier or did not have access before the Civil War. Most of the estimated effects are small and the signs are not wholly consistent with either model, under the null hypothesis that agriculture was the chief beneficiary of rail access. For example, we find that rail access appears to have increased urbanization, raised the likelihood of participation in the service sector, decreased agricultural yields, and reduced the share of improved acreage in total land area, opposite to the patterns predicted by either the Heckscher-Ohlin or Von Theunen models.

JEL-codes: N51 N71 (search for similar items in EconPapers)
Date: 2006-07
New Economics Papers: this item is included in nep-agr, nep-geo, nep-his and nep-ure
Note: DAE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Published as Rosenbloom, J. (ed.) Quantitative Economic History: The Good of Counting. London: Routledge, 2008.

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