A Study of the Economic Benefits of the Governor's Road Improvement Program (GRIP)

Study Abstract

This study by Jeffrey M. Humphreys, Terry College of Business, The University of Georgia, October 23, 2003, investigates the economic effects of the Governor’s Road Improvement Program (GRIP), and finds evidence of a beneficial linkage between the state’s developmental highways and rural economic development. The study evaluates the economic effects of both completed GRIP corridors as well as partially completed corridors that have a finished section that feeds into a completed corridor or interstate. Location on a major multi-lane highway fosters economic growth, particularly in the rural counties that need it the most – rural counties located in Middle and South Georgia. This conclusion is well grounded. The criteria used in the three analytical methods evaluated whether or not highway improvements enhance economic performance. The analysis of this data, inclusive of all of Georgia’s rural counties, provided the evidence that GRIP encourages development in rural Georgia. The following commentary and opinions are augmented with references to readily available data.

Study Document

Please click on the links below for copies of the Study Table of Contents and Study document. Both are in .pdf format:

• Table of Contents
• A Study of the Economic Benefits of the Governor’s Road Improvement Program (GRIP)

Study Findings: Phase I

Methodology:

Based on their GRIP status and location on an interstate highway, Georgia’s rural counties were divided into four groups. The economic performance of the counties between 1990 and 2000 was evaluated regarding total personal income, labor force, employment, and unemployment. Performance regarding population also was evaluated. Separate analyses were conducted for counties located in North Georgia, Middle Georgia, and South Georgia.

Major Findings:

• Among rural counties in South Georgia, GRIP counties experienced better performance across the total spectrum of economic factors (total personal income, labor force, employment, and unemployment) than non-GRIP counties.
• Among rural counties in Middle Georgia, GRIP counties had more growth in employment and labor force than non-GRIP counties. There was not a similar effect on personal income, the number of unemployed persons, or the unemployment rate, however.
• Among rural counties in North Georgia, GRIP counties experienced sharper drops in the number of unemployed persons and unemployment rates than the non-GRIP group. GRIP counties in North Georgia did not experience more growth in personal income, employment, or labor force, however.
• GRIP did not produce more growth in population in any region of the state.
• GRIP counties on rural portions of interstate highways experienced more growth in employment than non-GRIP counties on rural interstate highways, perhaps because GRIP allows the advantages of an interstate to penetrate more deeply into the host county.
  

Study Findings: Phase II

Methodology:

Short-term economic impacts of GRIP construction were estimated for three representative projects.

Major Findings:

• Local outlays for GRIP projects generate positive benefits for rural counties in terms of output (gross receipts or sales), value added, labor income, and employment.
• The short-term economic impacts of spending by the Georgia Department of Transportation for GRIP road construction projects can be very significant in rural counties where the overall economic base is small.
• Output impacts exceed initial outlays, but the multiplier effects are very small – multipliers ranged from a high of 1.21 to a low of 1.15. This reflects the rapid leakage of dollars from the local economy to other areas.

Study Findings: Phase III

Illustrative case studies of four GRIP corridors were conducted US 441, the Fall Line Freeway, US 19, and the South Georgia Parkway to provide anecdotal evidence of GRIP’s economic development benefits and its developmental potential. Findings:

• Easy access to four-lane highways or interstates is vital to many types of businesses, ranging from tourism to retailing, manufacturing, mining, forestry, and agriculture.
• Easy access to four-lane highways and interstates are important factors considered by professionals involved in selecting sites for new companies.
• Multi-lane highways make it easier for employees to commute to and from work, making a wider range of jobs available to persons living in rural areas of the state.
• Multi-lane highways stimulate tourism-based economic development.
• Multi-lane highways enhance the prospects for developing productive synergies between businesses located in various cities traversed by the corridors.
• Multi-lane highways improve access to major statewide infrastructure investments, such as the ports in Savannah or Brunswick, rail hubs, or major airports.
• Multi-lane highways improve access to Georgia’s major military bases, enhancing both their productivity and the prospects for survival.
• Multi-lane highways make it easier for rural areas to tap into the economic development potential of major urban areas located in Georgia as well as in neighboring states.
• Multi-lane highways further advance Georgia’s development as a major distribution and transportation hub.

Study Figures

• Figure 1-1: GRIP Study areas
• Figure 1-2: GRIP Study County Classification Scheme
• Figure 1-3: GRIP Study Rural Interstate Counties
• Figure 1-4: GRIP Counties where Employment Growth outpaced
• Figure 2-1: Location of 3 Representative GRIP Projects
• Figure 3-1: Manufacturing within 6-mile radius from US 441 (north)
• Figure 3-2: Manufacturing within 6-mile radius from US 441 (south)
• Figure 3-3: Manufacturing within 6-mile radius from the Fall Line Fwy
• Figure 3-4: Manufacturing within 6-mile radius from US Hwy 19
• Figure 3-5: Manufacturing within 6-mile radius from the South GA Pkwy