Measuring Highway Bypass Impacts on Small Town Business Districts

The literature is inconclusive about the economic impact of highway bypasses on small town business districts. Locally imposed sales tax data can be used to construct cross-sectional, time series data for towns too small to be analyzed using U.S. Census data. With these data we examine bypass impacts using standard difference-in-difference methods and supplement the analysis with quasi-experimental analysis. The case study investigates the 1993 bypass of Stonewall, Oklahoma, a town of approximately 530 people. The analysis indicates the bypass highway had no significant effect on the already declining small town business district. The approach demonstrated in this paper can be used to assess the impacts of a wide range of policy treatments at the sub-county level.