Public capital stock and state productivity growth: Further evidence from an error components model

Abstract

The contribution of different types of public infrastructure on private production is investigated using time-series of cross-section data for the 48 contiguous states over the period 1970-1986. A Cobb-Douglas production function is estimated with unobserved state-specific effects. Measurement errors in public capital stock and its components are detected and rectified. © 1995 Physica-Verlag.