Railroads and Growth in Prussia
72 Pages Posted: 22 Feb 2014 Last revised: 22 Sep 2014
Date Written: August 18, 2014
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 nineteenth-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.
Keywords: Railroads, Transport Infrastructure, Technological Diffusion, Economic Growth, Population Growth
JEL Classification: O18, O33, N73
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