Working Paper: NBER ID: w15520
Authors: Jeremy Atack; Robert A. Margo
Abstract: During the 1850s, land in U.S. farms surged by more than 100 million acres while almost 50 million acres of land were transformed from their raw, natural state into productive farmland. The time and expense of transforming this land into a productive resource represented a significant fraction of domestic capital formation at the time and was an important contributor to American economic growth. Even more impressive, however, was the fact that almost half of these total net additions to cropland occurred in just seven Midwestern states which comprised barely less than one-eighth of the land area of the country at that time. Using a new GIS-based transportation database linked to county-level census, we estimate that at least a quarter (and possibly two-thirds or more) of this increase can be linked directly to the coming of the railroad to the region. Farmers responded to the shrinking transportation wedge and rising revenue productivity by rapidly expanding the area under cultivation and these changes, in turn, drove rising farm and land values.
Keywords: No keywords provided
JEL Codes: N51; N71; N91
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Fraction of improved acreage (Q15) | agricultural productivity (Q11) |
| IV estimate of treatment effect (C26) | DiD estimate of treatment effect (C22) |
| Railroad access (L92) | improved acreage in agriculture (Q15) |
| Railroad access (L92) | farm values (Q15) |