Railroads and Growth in Prussia

72 Pages Posted: 22 Feb 2014 Last revised: 22 Sep 2014

See all articles by Erik Hornung

Erik Hornung

University of Cologne - Center for Macroeconomic Research (CMR); CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Date Written: August 18, 2014

Abstract

We study the effect of railroad access on urban population growth. Using GIS techniques, we match triennial population data for roughly 1,000 cities in nineteenth-century Prussia to georeferenced maps of the German railroad network. We find positive short- and long-term effects of having a station on urban growth for different periods during 1840--1871. Causal effects of (potentially endogenous) railroad access on city growth are identified using propensity score matching, instrumental variables, and fixed-effects estimation techniques. Our instrument identifies exogenous variation in railroad access by constructing straight-line corridors between nodes. Counterfactual models using pre-railroad growth yield no evidence to support the hypothesis that railroads appeared as a consequence of a previous growth spurt.

Keywords: Railroads, Transport Infrastructure, Technological Diffusion, Economic Growth, Population Growth

JEL Classification: O18, O33, N73

Suggested Citation

Hornung, Erik, Railroads and Growth in Prussia (August 18, 2014). Available at SSRN: https://ssrn.com/abstract=2399352 or http://dx.doi.org/10.2139/ssrn.2399352

Erik Hornung (Contact Author)

University of Cologne - Center for Macroeconomic Research (CMR) ( email )

Cologne
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Munich
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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