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Does the US have an infrastructure cost problem? Evidence from the interstate highway system

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  • Mehrotra, Neil
  • Turner, Matthew A.
  • Uribe, Juan Pablo

Abstract

Between 1984 and 2008, expenditure per Interstate vehicle mile traveled fell 10%, while the price of new lane miles and pavement quality more than doubled. To reconcile these trends, we describe an Interstate cost function for a planner who minimizes the cost required to deliver a given level of highway services. Using administrative data, we estimate prices for lane miles and pavement quality and evaluate the user cost of the Interstate. User cost fell by half between 1994–2008, largely due to falling interest rates. In this sense, there is no problem with the cost of the Interstate.

Suggested Citation

  • Mehrotra, Neil & Turner, Matthew A. & Uribe, Juan Pablo, 2024. "Does the US have an infrastructure cost problem? Evidence from the interstate highway system," Journal of Urban Economics, Elsevier, vol. 143(C).
    • Handle: RePEc:eee:juecon:v:143:y:2024:i:c:s0094119024000512
    DOI: 10.1016/j.jue.2024.103681
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    More about this item

    Keywords

    Interstate highways; Infrastructure costs; Construction productivity;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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