Effect of Beltways on Metropolitan Economic Activity

Abstract

There is debate on the effect of beltways, also known as loop and perimeter highways, on metropolitan economic activity. This article contributes to that debate by evaluating the association between beltways and retail/service activity among 44 metropolitan areas in the United States. After controlling for other factors, statistical analysis indicates that metropolitan areas with one or more beltways fared less well in sales per capita than metropolitan areas with no beltways and metropolitan areas with one beltway fared better than those with two or more. The reason is that beltways deconcentrate metropolitan populations to levels that prevent the creation of trade areas sufficient to support retail and service firms at the margins. Policy implications are offered.