Modeling economic impacts of transportation infrastructure in Pennsylvania considering spatial dependency across counties

Quantifying the impact of investment in transportation infrastructures such as bridges, roads, traffic signals, ports, and railroads has been of immense interest to researchers. Due to the nature of transportation infrastructure and how it geographically connects regions, any transportation-related investment is likely to have an impact on the economy of neighboring territories. This phenomenon, known as ‘spatial spillover’, is of great concern for transportation professionals and policymakers when deciding on investments in transportation infrastructure. This study aims to investigate the impact of transportation infrastructure investment on the GDP at a county level in Pennsylvania, using a spatial econometric model to quantify the impact of spatial spillover. The novelty of this study lies in the proposed structures of spatial dependency, including distance, inverse distance, proximity, and interstate highway connections. Analysis results show evidence of the presence of spatial spillover among the counties in Pennsylvania. An elasticity analysis is conducted to quantify the impact of several factors, including transportation infrastructure investments, on the GDP across all counties. Key findings indicate that investments in bridges, traffic signals, and safety infrastructure positively contribute to economic growth, while higher crash frequency is associated with decreased economic activity. Notably, infrastructure spending on safety shows a significantly higher impact on GDP compared to other types of investment.