Linking Economic Development to Highway Improvements: Pine Ridge Reservation, South Dakota

Abstract

Much of the literature on the economic benefits associated with investments in transportation infrastructure focuses on locations with at least some measure of private-sector economic activity. The focus here is on the Pine Ridge Indian Reservation in South Dakota, an area with extremely limited private economic activity and a transportation network with limited connectivity and accessibility. The study was one of a series sponsored by FHWA to examine linkages between transportation improvements and economic development in rural areas. The Pine Ridge study established a framework for analyzing these linkages and focused the analysis on tourism, a key sector that both offers great potential for economic development and is dependent on improvements in transportation infrastructure. The analysis estimated the potential benefits of the tourism sector and identified the transportation improvements that would be needed to support this sector. It was found that, assuming implementation of a suite of supportive initiatives, a mature tourism sector at Pine Ridge could attract more than 1 million visitors each year, which would have an estimated total economic impact of $153 million during a 15-year period. By the end of the analysis period, these tourists would generate more than 1 million automobile trips per year, with a peak average daily traffic of 5,200 vehicles. The local enhancements in transportation infrastructure that would be needed to provide adequate levels of service include both upgrading the functional class of key roads and performing adequate maintenance throughout the life cycle of the improved roads. The costs of these transportation investments are estimated at $73.3 million.