Philosopher’s Concrete: Dam Construction, Farmland Values, and Agricultural Production in the Western US, 1890–1920

• Main Author: Soudeh Mirghasemi
• Format: Article
• Language: English
• Published: Economic & Business History Society 2018-06-01
• Series: Essays in Economic and Business History
• Online Access: https://www.ebhsoc.org/journal/index.php/ebhs/article/view/28

Did construction of the Bureau of Reclamation dams in the early 20th century raise farm values and increase agricultural output? I construct a new county-level panel dataset from 1890 to 1920 with information on geography, climate, politics, agriculture, and major dams, and then evaluate the effect of the Bureau of Reclamation dams on the value of farms and on crop productivity. Using fixed effect panel estimation, I find that new federal dam construction increased the average value of farmland by approximately 6.4 percent. When I apply an instrument to control for potential endogeneity, the effect of Bureau dams on farmland value increases in size, although the estimate also becomes noisier and is no longer statistically significant. My results indicate that Bureau dams constructed in prior decades and the new dams constructed by other agencies did not have a statistically significant effect on the value of farms. In terms of crop output, the only crop affected by the dams was alfalfa.