STATE-LEVEL CAPITAL AND INVESTMENT: UPDATES AND IMPLICATIONS

This paper presents state-by-state capital stock and gross investment estimates for 19902007. I follow the methodology of Garofalo and Yamarik (The Review of Economics and Statistics, 84, 2002, 31623) and apportion the national capital stock to the individual states using one-digit NAICS income data. I then test the soundness of the data by estimating a CobbDouglas production function and a Solow growth model using a variety of panel data estimators. Under both models, I obtain estimates of the output elasticity for capital that are plausible and close to the observed national income share of one-third. (JEL O47, O51, R11)