DAE Program Meeting
April 14, 2012
Elizabeth U. Cascio, Dartmouth College and NBER, and Ebonya L. Washington, Yale University and NBER
The Voting Rights Act of 1965 (VRA) has been called one of the most effective pieces of civil rights legislation in U.S. history, having generated dramatic increases in black voter registration and black voter turnout across the South. Cascio and Washington show that the expansion of black voting rights in some southern states brought about by one requirement of the VRA - the elimination of literacy tests at voter registration - was accompanied by a shift in the distribution of state aid toward localities with higher proportions of black residents, who held new found power to affect the reelection of state officials. That finding is consistent with models of distributive politics. The estimates here imply an elasticity of state transfers to counties with respect to turnout in presidential elections - the closest available measure of enfranchisement - of roughly one.
Dave Donaldson, MIT and NBER, and Richard Hornbeck, Harvard University and NBER
Donaldson and Hornbeck examine the historical impact of railroads on the American economy. Expansion of the railroad network and decreased trade costs may affect all counties directly or indirectly, an econometric challenge in many empirical settings. However, the total impact on each county can be summarized by changes in that county's "market access," a reduced-form expression derived from general equilibrium trade theory. The authors measure counties' market access by constructing a network database of railroads and waterways and calculating lowest-cost county-to-county freight routes. As the railroad network expanded from 1870 to 1890, changes in market access were capitalized in agricultural land values with an estimated elasticity of 1.5. Removing all railroads in 1890 decreases the total value of U.S. agricultural land by 73 percent and GNP by 6.3 percent, more than double the social saving estimates of RobertFogel (1964). Fogel's proposed Midwestern canals would mitigate only 8 percent of losses from removing railroads.
Tomas Cvrcek, Clemson University and NBER, and Nicholas Laurence, Clemson University
Diffusion of technology played a crucial role in the onset of Industrial Revolution. Cvrcek and Laurence focus on the spread of the Industrial Revolution's most vaunted technology, the steam engine. They are interested in estimating the effect of a location's own geographic and economic conditions (access to transportation, level of urbanization, size of local market) on steam engine adoption, and of the interaction between neighboring locations. Their data come from three steam engine censuses undertaken in 1841, 1852, and 1863 in the then Habsburg Empire. The level of geographic detail allows them to disaggregate the Empire's territory down to the district level (where districts were somewhat smaller than U.S. counties). They combine this information with data on local fuel prices, navigability of rivers, the spread of the railroad, the results of the 1857 population census, latitude and longitude of each district's administrative center, and other geographic data to produce a dataset of 1,468 observations for each of the three years. Using a spatial-autoregressive model that allows for neighborhood effects operating both through neighbors' explanatory variables and neighbors' dependent variable, they are able to quantify the contribution of each district's own conditions for technology adoption relative to those of its neighbors and to identify locations that were the most influential sources of technological diffusion and the most (and least) auspiciously located recipients.