GIS and American Economic History
Atack, Jeremy. (2013). On the Use of Geographic Information Systems in Economic History: The American Transportation Revolution Revisited. The Journal of Economic History, 73(02), 313-338.
When people think about GIS applications, they image it being applied to environmental problems or geography. What about economics? Dr. Jeremy Atack is using GIS to build a transportation database for the U.S. and show its importance in economic growth and development. To build the database, Dr. Atack started with the country’s railroad network. Early maps proved to be inaccurate and indicated railways that were not yet constructed. Dr. Atack solved this problem by using state-level digitized maps from 1911, which predates a years before the maximum railroad track mileage in the country. These maps are more accurate because Dr. Atack compared the 1911 maps to the US Department of Transportation’s 2012 maps that show railroads still in operation. Comparing the 1911 maps to the 2012 maps reveals that the 1911 railroad locations are just a few hundred meters from current railroad tracks.
Next, Atack geo-referenced the 1911 maps by providing spatial coordinates on easily identified points from the 1911 map and then corresponding the point on the 2012 map. This was done for over 1,380,000 points! The process was repeated using maps from 1870 and 1840. Dr. Atack then went to create a database for the country’s canal system and navigable rivers; however, this proved to be more difficult because the definition of what constitutes a navigable river is not clear. For example, canoes can carry cargo up and down a river but a steamboat can only navigate a river with the proper depth. Dr. Atack narrowed the definition of navigable rivers to only rivers that can handle steam navigation. Maps from the U.S. Army Corp of Engineers were used to map out canals and navigable rivers. Dr. Atack is continuing to expand the transportation database.
Transportation infrastructure is critical to economic development because it reduces barriers to trade, such as distance, transportation costs, shortages, and monopsony power. Thomas Jefferson’s Secretary of the Treasury, Albert Gallatin, argued that markets were too slow to construct a transportation network. Gallatin got the federal government involved in building roads and canals to solve this market failure. Over the course of 200 years, the federal government funded infrastructure projects around the country.
Using county-level data, Dr. Atack studied the impacts of railroads on economic development in the Midwest. Railroads were responsible for over a half of the region’s urbanization. Areas served by railroads saw land values increase and farmers planted more crops in the area too. Railroads account for as much as two-thirds of the increase in improved acreage in the Midwest. Counties with a railroad saw banks enter the area within two years after the construction of a railroad. Beyond the Midwest, railroads brought manufacturing sectors to different parts of the country and increased productivity. Railroads were also responsible for equalizing the price of wheat between New York and Chicago. Before 1850, the price ratio of wheat in New York relative to Chicago was about 2 to 1. After 1850, improvements in transportation and increased railroad tracks decrease the ratio to 1 to 1. This follows the law of one price, which states that traders will buy goods in a cheaper market and then resell it in a more expensive market until prices are equal in both locations.
Dr. Atack’s work is impressive and it can be used to study the impact of infrastructure on economic development. This can be applied to developing countries and asses how transportation networks can impact urbanization and the environment. Next time you think about GIS, image its application to economics and history.