"Highway infrastructure can affect the economy in a number of ways," according to the report by the Santa Monica, California-based nonprofit institution. "It can enable producers to reach markets more cheaply, to increase the size of their market area, and to have a broader choice of input suppliers. It can increase the speed with which producers can reach markets or inputs, allowing them to hold lower inventories and carry out just-in-time production. Highway infrastructure can enable workers to choose among a wider array of employment opportunities and to live farther from their workplaces. It can enable consumers to have a more varied choice of goods, services, and prices."

The more localized economic effects of highway infrastructure across the nation vary greatly, however, the report notes, and depend on a number of systematic and geographic factors.

"Some transportation infrastructure serves purely local needs, whereas other infrastructure enables connections to national and international markets," according to the report. "Besides the longer-run effects, highway infrastructure also can boost economic activity through immediate construction activity that results from new highway infrastructure investment."

One key advantage of the federal government pursuing a strategy to focus funding on projects that benefit a wide area, according to the report, is that Washington would be able to address multijurisdictional issues that might arise.

Rand recommends more quantitative analysis of changes in such economic aspects as productivity, output, and employment. That statistical research, the report states, "can make a valuable contribution by quantifying the value of those effects and comparing that value to highway infrastructure costs."

The report also indicates that research should be expanded to assessing not just the value or quantity of the nation's highway infrastructure but also its condition. In addition, researchers should apply the latest available data to past studies to gauge the more recent impacts of such factors as increased globalization on the relationships between the economy and transportation infrastructure.

The 116-page report, "Highway Infrastructure and the Economy: Implications for Federal Policy," is available at bit.ly/Highway-Report.