Abstract

During the first industrial revolution the English economy underwent a spatial transformation to go along with its structural transformation in employment. It became highly urbanized and, apart from London, its urban growth shifted to the northwest. This paper examines the role of transport and access to markets in causing this spatial transformation. Transport changed greatly with infrastructure improvements and technological and organizational innovations. We focus on those occurring before the era of railways and steam ships, when wagons, canals, and sail ships were dominant. We construct a measure of market access for 458 towns in 1680 and 1830 using a new multi-modal transport model and then estimate the effects of lower trade costs through changes in market access. Our regression model controls for various town characteristics, including coal endowments. The results show that changes in market access had a large positive effect on changes in urban population. The results contribute to a new understanding of the industrial revolution and spatial economic growth more generally.