Transportation Costs and the Spatial Organization of Economic Activity

Stephen J. Redding, Matthew A. Turner

Research output: Chapter in Book/Report/Conference proceedingChapter

266 Scopus citations


This chapter surveys the theoretical and empirical literature on the relationship between the spatial distribution of economic activity and transportation costs. We develop a multiregion model of economic geography that we use to understand the general equilibrium implications of transportation infrastructure improvements within and between locations for wages, population, trade, and industry composition. Guided by the predictions of this model, we review the empirical literature on the effects of transportation infrastructure improvements on economic development, paying particular attention to the use of exogenous sources of variation in the construction of transportation infrastructure. We examine evidence from different spatial scales, between and within cities. We outline a variety of areas for further research, including distinguishing reallocation from growth and dynamics.

Original languageEnglish (US)
Title of host publicationHandbook of Regional and Urban Economics
PublisherElsevier B.V.
Number of pages60
StatePublished - 2015

Publication series

NameHandbook of Regional and Urban Economics
ISSN (Print)1574-0080

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Economics and Econometrics
  • Urban Studies


  • Highways
  • Market access
  • Railroads
  • Transportation


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