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Abstract
Prior analysis regarding transportation infrastructure has often focused on the aggregate effects
of public investment on economic growth or activity, usually at a national or state level. Modeling
efforts that attempt to treat all counties as equivalent units, while assuming a homogeneous modeling
structure for all the units, may miss important information regarding the statistical and causal
relationships between economic activity and transportation infrastructure. This study examines
the interrelationships between infrastructure and activity using two Washington State highway
infrastructure datasets in combination with county-level employment, wages, and establishment
numbers for several industrial sectors for a subset of counties from 1990 to 2004. Estimates using
vector autoregressions, error correction models, and directed acyclic graphs are made. The results
show that the relationships between infrastructure investment and economic activity are often weak
and are not uniform in effect.