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Road End Points and City Sizes

The Review of Economics and Statistics 2026 108(1), 90-109
I examine the long-run effects of the timing of railroad construction on city sizes. I first present a stylized model that predicts that towns that are railroad end points for a longer period of time become persistently larger. I then show that, in a sample of Brazilian railroad towns, time as end point strongly predicts town size: each additional year that a town was a railroad end point in the past is associated with a town population 0.107 log points larger in 2010. Additional testable implications of the model and an instrumental variable approach suggest that such an association reflects a causal effect.