A Penny for Your Thoughts / W. Walker Hanlon, Stephan Heblich, Ferdinando Monte, Martin B. Schmitz.

Format:

Book

Author/Creator:

Hanlon, W. Walker.

Contributor:

National Bureau of Economic Research.

Heblich, Stephan.

Monte, Ferdinando.

Schmitz, Martin B.

Series:

Working Paper Series (National Bureau of Economic Research) no. w30076.

NBER working paper series no. w30076

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2022.

Summary:

How do communication costs affect the production of new ideas and inventions? To answer this question, we study the introduction of the Uniform Penny Post in Great Britain in 1840. This reform replaced the previous system of expensive distance-based postage fees with a uniform low rate of one penny for sending letters anywhere in the country. The result was a large spatially-varied reduction in the cost of communicating across locations. We study the impact of this reform on the production of scientific knowledge using citation links constructed from a leading academic journal, the Philosophical Transactions, and the impact on the development of new technology using patent data. Our results provide quantitative causal estimates showing how a fall in communication costs can increase the rate at which scientific knowledge is exchanged and new ideas and technologies are developed. This evidence lends direct empirical support to an extensive theoretical literature in economic growth and urban economics positing that more ideas can emerge from communication between individuals.

Notes:

Print version record

May 2022.