American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
In Harm's Way? Infrastructure Investments and the Persistence of Coastal Cities
American Economic Review
vol. 115,
no. 1, January 2025
(pp. 77–116)
Abstract
Coasts contain a disproportionate share of the world's population, reflecting historical advantages, but environmental change threatens a reversal of coastal fortune in the coming decades as natural disasters intensify and sea levels rise. This paper considers whether large infrastructure investments should continue to favor coastal areas. I estimate a dynamic spatial equilibrium framework using detailed geo-referenced data on road investments in Vietnam from 2000 to 2010 and find evidence that coastal favoritism has significant costs. The results highlight the importance of accounting for the dynamic effects of environmental change in deciding where to allocate infrastructure today.Citation
Balboni, Clare. 2025. "In Harm's Way? Infrastructure Investments and the Persistence of Coastal Cities." American Economic Review, 115 (1): 77–116. DOI: 10.1257/aer.20191943Additional Materials
JEL Classification
- H54 National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock
- O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- P25 Socialist Systems and Transitional Economies: Urban, Rural, and Regional Economics
- Q54 Climate; Natural Disasters and Their Management; Global Warming
- R11 Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R42 Transportation Economics: Government and Private Investment Analysis; Road Maintenance, Transportation Planning
- R58 Regional Development Planning and Policy