Railroads of the Raj: Estimating the Impact of Transportation Infrastructure

2018/03/30 by Dave Donaldson · 1 citation
Economics, Econometrics and Finance · Mathematics · #Global trade and economics #Fiscal Policy and Economic Growth #Politics, Economics, and Education Policy #Economics #Statistic #Welfare #Econometrics #International economics #Statistics #Mathematics

paper · pdf · doi:10.1257/aer.20101199

openalex publication_date 2018/03/30 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/06

Abstract

How large are the benefits of transportation infrastructure projects, and what explains these benefits? This paper uses archival data from colonial India to investigate the impact of India's vast railroad network. Guided by four results from a general equilibrium trade model, I find that railroads: (1) decreased trade costs and interregional price gaps; (2) increased interregional and international trade; (3) increased real income levels; and (4) that a sufficient statistic for the effect of railroads on welfare in the model accounts well for the observed reduced-form impact of railroads on real income in the data. (JEL H54, L92, N75, O22, R12, R42)

Citations

• INVESTMENT IN INDIAN RAILWAYS, 1845–1875
• Technology, Geography, and Trade
• Is public expenditure productive?
• The Transfer Problem and Transport Costs, II: Analysis of Effects of Trade Impediments
• A ‘reciprocal dumping’ model of international trade
• The Long and Short of the Canada-U.S. Free Trade Agreement
• The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth
• Dams
• Trade Costs

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