CASE STUDIES OF THE ECONOMIC IMPACT OF HIGHWAY BYPASSES IN KANSAS
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The construction of highway bypasses has resulted in many economic benefits both for
intercity motorists as well as residents of towns with bypasses. Despite the benefits of bypasses,
they remain controversial. Local business owners in the town being bypassed fear that the
reduction of traffic passing through the town will adversely affect their sales.
The purpose of this study is to add to the literature concerning the economic impact of
highway bypasses on small towns. The measured impacts are (1) total employment of bypass
towns, (2) retail sales of the towns' travel-related businesses, (3) employment of the towns'
travel-related businesses, and (4) the bypass town as a whole.
To measure the impact of the bypasses on total employment of bypass towns, each of the
nine sample towns was matched with a group of control towns. Total employment of each
bypass town was regressed on total employment of its control towns and a bypass dummy
variable used to measure the effect of the bypass. The equations were estimated by ordinary
least squares (OLS) regression. The other three impacts were obtained by interviewing the
owners and managers of 54 travel-related businesses located in the nine bypass towns.
The statistical results are consistent with the hypothesis that the bypass did not have a
statistically significant effect on total employment of the bypass towns. In the opinion of most of
the owners and managers of the travel-related businesses the bypasses had a negative impact on
their retail sales and employment, and on the town as a whole. There was a substantial variation
in opinion regarding the impact of the bypass on company retail sales, and employment, and on
the town as a whole among the industry groups in the sample.