November 22^th, 2019

The Local Impact of Containerization

Gisela Rua – Senior Economist – Board of Governors of the Federal Reserve System

ABSTRACT

“We investigate how containerization impacts local economic activity. Containerization is premised on a simple insight: packaging goods for waterborne trade into a standardized container makes them cheaper to move. We use a novel cost-shifter instrument — port depth pre-containerization — to contend with the non-random adoption of containerization by ports. Container ships sit much deeper in the water than their predecessors, making initially deep ports cheaper to containerize. We find that counties near containerized ports grew about twice as fast as other coastal port counties between 1950 and 2010 because of containerization. Gains are concentrated in areas with initially low land values.”

1-2p.m. | Room 305