| Scope and method of study. This study's purposes were to construct a detailed public highway capital stock series for the 48 contiguous United States, to estimate an elasticity of substitution between public highway capital and private investment in transportation services, and examine the effects of an increase in public capital investment on Oklahoma's economy. Using the highway stock series and other data in a panel set, a cross-section time-series analysis estimated the elasticity of substitution. A dynamic computable general equilibrium (CGE) model was used to simulate the effects of the increased public investment on the Oklahoma economy, including income levels and gross regional product, over a period of twenty years.; Findings and conclusions. The output elasticity for public highway capital was estimated to be near 0.8, higher than that estimated in previous studies. Public highway capital was found to be a substitute for private investment in transportation services. The increase in public highway investment, as modeled with the CGE model, had a positive effect on disposable household income, private capital income, and labor income, while gross regional product fell. |
