2001 Articles

The U.S. as a Coastal Nation

Rappaport, Jordan; Sachs, Jeffrey D.

U.S. economic activity is overwhelmingly concentrated at its ocean and Great Lakes coasts and at navigable rivers. Economic theory suggests four possible explanations: a present-day productivity effect, a present-day quality-of-life effect, delayed adjustment following a historical productivity or quality-of-life effect, and an agglomeration effect following a historical productivity or quality-of-life effect. Controlling for correlated natural attributes such as the weather and including proximity measures which a priori should absorb any quality-of-life effect, linear regressions suggest that the high coastal concentration of economic activity is primarily due to a productivity effect. Extensively controlling for historical economic density suggests that such a productivity effect continues to be operative today.