Economic development, in this report, is measured by the creation of employment and business establishments. Statistical tests to uncover and quantify the importance of roads for development were conducted using data from all 159 counties within the state of Georgia. Three different specifications for roads are used in the estimation process. The first specification estimates the effects of the number of paved miles of state routes and county roads built in a county in the preceding four years. This specification attempts to measure the development consequences of networks of roads built in the immediate past.
Results show that such road construction has had a significant, positive effect on development.
In fact, between 1992 and 1994, every 2 miles of road built in a county are associated with an average of 20 new jobs and 1 new business establishment per year. This result is magnified considering that on average over 70 miles of roads per county were built in a ten-year period. This is because much of the road construction and employment creation has taken place in the Atlanta area. While roads are still a significant determinant of development in non-ARC counties, the estimates of their contribution are not as large. These include population density, the level of urbanization of the county, past employment creation, and past population growth.