Analytic work by Aschauer, Munnell, McGuire, and others has indicated that there are positive relationships between investments in infrastructure and economic productivity at the national and state levels. A better understanding of the linkages between transportation investments and economic activity as measured in terms of macroeconomic factors such as employment, expenditures, income, production of goods and services, productivity, and competitiveness is needed. Accurate measures of the capital stock (e.g., the sum of past investments) are important to macroeconomic analysis and indirectly to the development of public policy. The 1974 U.S. DOT report, Capital Stock Measures for Transportation, estimated the value of the private and public capital stock in transportation for the period 1950 to 1970. It also estimated the cost of capital services, the rate of depreciation, and capacity in the various transportation modes. Similar estimates for the period 1970 to 1990 are needed to determine whether there has been a significant slowdown over time in the rate of net capital formation in different transportation modes, as well as the impact of government actions on net investments to public transportation capital.

The overall objective of this research was to improve the understanding of the linkages between transportation investments and economic performance. The goal of this research was to develop an improved estimate of the value of the public and private capital stock (structures, equipment, and land) in transportation over time. Macroeconomic studies of the contribution of transportation and infrastructure investment to productivity were critically reviewed, and the types of data on transportation capital stock needed to conduct further research were identified. The dataset created in the 1974 U.S. DOT study was assessed to identify its strengths and weaknesses, feasible sources of information for a revised dataset were identified, and mechanisms for routine updates to account for depreciation and the discounted value of capital were described. Processes to isolate divergent trends in transportation investment, to recognize investments made without a major transportation purpose, and to assess the influences of marginal investments were defined. A database of transportation infrastructure investment and capital stock by mode and state was created and documented. The resulting dataset was used in the production functions described in recent literature to validate the linkages between transportation investment and economic productivity. Other refinements to macroeconomic models that would be possible with the updated and expanded data were identified, including use of surrogate variables to account for the productivity effects of nontransportation investments.

Status: The contractor's final report was published as NCHRP Report 389, "Macroeconomic Analysis of the Linkages Between Transportation Investments and Economic Performance."