Assessment of the productivity of highway stock and maintenance spending by disaggregate industry data analysis

This dissertation examines the link between the service from the effective highway stock and the productivity by using disaggregate industry data. The research pays attention to the effect of maintenance spending, which the previous research generally ignored. We identify appropriate estimation equations to obtain precise estimates of the elasticieties of highway stock and maintenance spending.; Chapter one reviews the previous empirical evidence from aggregate data, disaggregate state data, disaggregate industry data, and international data analysis. Earlier aggregate data analysis presented a substantially large effect, and most research reported a positive effect of public capital.; Chapter two estimates the elasticities of highway stock and maintenance spending by the production function approach. Unit root testing showed that all the variables are nonstationary, thus the estimation was performed in the first differenced variables. The elasticity of highway stock is substantially large, but that of maintenance spending is negligibly small.; Chapter three estimates the elasticities of highway stock and maintenance spending by the growth accounting method. The same data in Chapter two are employed. Unit root testing showed that the adjusted growth rate of highway stock is nonstationary, thus the estimation took into account the autocorrelation of the error term. The elasticity of highway stock is considerably large, but that of maintenance spending is negligibly small. The elasticity of highway stock is smaller than that from Chapter two. In addition, the continuous effects of highway stock and maintenance spending were examined. The elasticity of the change in highway stock is considerably large, but that of the change in maintenance spending is negligibly small. In order to evaluate the appropriateness of the decomposition, the estimation was performed for different methods of adjustment of highway stock and maintenance spending. The estimation results confirm the appropriateness of the decomposition method.; Highway stock has a positive, substantially large, and continuous effect on the private productivity, while maintenance spending, as a factor enhancing the effectiveness of highway stock, has an insignificant and negligibly small positive effect. Therefore, the productivity boost effect from road service comes mainly from the amount of highway stock rather than the effectiveness through maintenance spending.