Boosted income, busted environment: a tradeoff in the wider economic impacts of transport corridor investments?

• Published in: Environment and development economics 2024-04, Vol.29 (2), p.107-126
• Main Authors: Melecky, Martin, Sharma, Siddharth, Subhash, Hari
• Format: Article
• Language: English
• Subjects: Air pollution; Attainment; Deforestation; Economic activity; Economic impact; Educational attainment; Endowment; Environmental impact; Environmental quality; GDP; Gross Domestic Product; Heterogeneity; Highway construction; Highways; Income; Infrastructure; Nitrogen dioxide; North and South; Outdoor air quality; Particulate matter; Per capita; Quadrilaterals; Roads & highways; Skills; Tradeoffs; Transportation; Transportation corridors
• ISSN: 1355-770X; 1469-4395
• DOI: 10.1017/S1355770X23000177

The literature on the impacts of transport corridors points to a tradeoff between income and environmental quality. We estimate the impacts of India's Golden Quadrilateral and North-South-East-West highways on income and environmental quality to test this tradeoff hypothesis. Applying the difference-in-difference method to district level data, we find that the highways increased both local income and particulate matter air pollution. The estimated increase in air pollution is robust to using an instrumental variables approach, while that in income is not. Examining heterogeneity in these impacts, we find that the income–environment tradeoff was less steep in districts with initially higher educational attainment rates because they experienced a smaller increase in air pollution due to the highways.