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Economic Returns to Rural Infrastructure Investments

Understanding the economic returns on investing in rural infrastructure improvements is a critical element in the decision-making process for public and private investors.

On April 10-11, 2018, Farm Foundation and USDA's Economic Research Service brought together applied researchers and rural infrastructure stakeholders to examine the impact of rural infrastructure investments on economic activity and policy-related research findings. USDA Deputy Secretary Steve Censky provided the opening keynote address.

The intent of the workshop was to review the best available evidence and chart a path towards producing practical research on the economic returns of investments in rural infrastructure, including highways, bridges, railways, broadband, electrical systems, and water and sewer systems.

"A current approach to rank and select rural infrastructure projects is evaluating expected returns on investment (ROI). But today, relatively little is known about the economic or social returns on infrastructure investments," says Farm Foundation President Constance Cullman. "Some studies have looked at infrastructure relative to productivity or GDP, but very few have assessed ROI or looked specifically at rural infrastructure investments. This type of information is needed to help public and private leaders make decisions about infrastructure investments."

Through a series of seven commissioned papers, workshop participants examined what is known about the return on investment (ROI) in infrastructure improvements, identify gaps in the knowledge base, and assess how this information can be used in future investment decision making by public- and private-sector leaders. The final peer-reviewed papers are expected to be available in a few weeks.

Posted here are the PowerPoint presentations used by the paper authors as they reported their findings at the workshop. 

 The Economically Efficient Composition of Rural Infrastructure Investment
Mark Burton, University of Tennessee and Wesley Wilson, University of Oregon

 Economic Impacts, Costs and Benefits of Infrastructure Investment: Lesson from the Literature
Authors: John Pender, USDA Economic Research Service, and Maximo Torero, World Bank

 Infrastructure Project Prioritization in Theory and Practice: Examples in Federal U.S. and International Programs
Authors: Mike Bennon and Rajiv Sharma, both of Stanford University

 Rank and Selection of Infrastructure Projects: A State and Local Perspective
Authors: Kent Wolfe, University of Georgia, and David Tanner, Carl Vinson Institute of Government, University of Georgia

 Examining Benefit-Cost Analysis in Infrastructure Projects
Author: Anthony Homan, Federal Maritime Commission

 The Value of Rural and Urban Public Infrastructure
Authors: David Albouy, University of Illinois, Arash Farahani, Independent Budget Office of New York City, and Heejin Kim, University of Illinois

 Impacts of the USDA Broadband Loan and Grant Programs: Moving Toward Estimating a Rate of Return
Authors: Mitch Renkow, and Ivan Kandilov, both of North Carolina State University

Workshop participants included university researchers, government agency representatives, private consultants, community leaders, and experts in the economic assessment process used by international development organizations for project funding.








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