On Measuring the Benefits of Lower Transport Costs

By Hanan G. Jacoby, B. Minten. 2008

232 citations recorded by the source corpus.

Despite large amounts invested in rural roads in developing countries, little is known about their benefits. This paper derives an expression for the willingness-to-pay for a reduction in transport costs from the canonical agricultural household model and uses it to estimate the benefits of a hypothetical road project. Estimation is based on novel cross-sectional data collected in a small region of Madagascar with enormous, yet plausibly exogenous, variation in transport cost. A road that essentially eliminated transport costs in the study area would boost the incomes of the remotest households-those facing transport costs of about USD 75/ton-by nearly half, mostly by raising non-farm earnings. This benefit estimate is contrasted to one based on a hedonic approach.

Subfields: Economics and Econometrics, Political Science and International Relations

View Paper: https://www.semanticscholar.org/paper/6fa1d1647ad4dbc79cced5a92e07fba90d85d039

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Citations in the corpus

Do rural roads create pathways out of poverty? Evidence from India (2018, background): “In doing so, this paper adds to an existing body of work on the impact of rural roads, which has largely been reliant on non-random provision of roads (see Dercon et al., 2009; Gibson and Olivia, 2010; Gibson and Rozelle, 2003; Jacoby, 2000; Jacoby and Minten, 2009; Khandker et al., 2009; Khandker a”
On the Structural Transformation of Rural Africa (2017, background): “All-season rural road access appears a key means of overcoming spatial poverty traps, not least of which by encouraging greater market participation, input use, and agricultural specialization (Stifel and Minten 2008, Calderon 2009, Jacoby and Minten 2009, Gollin and Rogerson 2010).”
Isolation and agricultural productivity (2008, background): “…costs drive a wedge between the value marginal product of the inputs and the market prices of these inputs (e.g. cost of fertilizer at the factory gate relative to the price paid by the farmer), input use per unit of land is likely to fall, and consequently so are yields (Jacoby and Minten, 2007).”
Roads, exports and employment: Evidence from a developing country (2017, background): “…firms' inventories and sourcing patterns and performance of the formal manufacturing sector in India (see Datta, 2012 and Ghani et al. 2012, respectively); and households' incomes in Nepal, Madagascar, and Indonesia (see Jacoby, 2000; Jacoby and Minten, 2009 and Gertler et al., 2014, respectively).”
Road to Specialization in Agricultural Production: Evidence from Rural China (2012, unknown): “Scholars have argued that rural roads are a key instrument in overcoming spatial poverty traps in developing countries (Calderón 2009; Escobal and Ponce 2002; Fan and Hazell 2001; Jacoby and Minten 2008).”
History, Path Dependence and Development: Evidence from Colonial Railroads, Settlers and Cities in Kenya (2017, unknown): “…urban, Asian and African population growth in 1901-1962, but these effects decrease as we move away from the railroad and are zero after 30 km, 10 km, 10 km and 20 km 10The explorer routes used as placebo lines are to some extent least cost paths “by foot”, as the explorers traveled by foot then.”