Economic Benefits and Returns to Rural Feeder Roads: Evidence from a Quasi-Experimental Setting in Ethiopia
Using an equivalent variation approach, we estimate households’ willingness-to-pay for rural feeder roads in Ethiopia. The problem of endogenous road placement is addressed by a purposeful data collection process as the survey site was chosen in such a way that the primary difference between househo...
| Autores principales: | , , |
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| Formato: | Artículo preliminar |
| Lenguaje: | Inglés |
| Publicado: |
International Food Policy Research Institute
2012
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/153878 |
| _version_ | 1855543710074273792 |
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| author | Stifel, David Minten, Bart Koru, Bethlehem |
| author_browse | Koru, Bethlehem Minten, Bart Stifel, David |
| author_facet | Stifel, David Minten, Bart Koru, Bethlehem |
| author_sort | Stifel, David |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Using an equivalent variation approach, we estimate households’ willingness-to-pay for rural feeder roads in Ethiopia. The problem of endogenous road placement is addressed by a purposeful data collection process as the survey site was chosen in such a way that the primary difference between households in the otherwise homogeneous region is that transport costs to the same market differ substantially within the region (most remote households have to walk eight hours to reach the market). Using this quasi-experimental setting, we compare the economic behavior of households by remoteness, allowing us to estimate the benefits of having access to feeder roads for rural households. We find that the benefits of reducing transportation costs by 50 US Dollars per metric ton for the most remote households would result in benefits worth roughly 35 percent of household consumption and that a hypothetical gravel road built halfway through the survey site that lasts 10 years will have an internal rate of return that ranges from 12 to 34 percent, using conservative assumptions. The lower range of estimates allows for transport services that are restricted to intermediate means of transport such as donkey-drawn carts. These results suggest that investments in rural feeder roads are cost-effective ways to help reduce widespread poverty even in unfavorable settings where (a) small-scale farmers have low levels of marketed agricultural surplus, (b) nonfarm earnings opportunities are negligible, and (c) the provision of motorized transport services is not guaranteed. |
| format | Artículo preliminar |
| id | CGSpace153878 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2012 |
| publishDateRange | 2012 |
| publishDateSort | 2012 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1538782025-11-06T07:15:59Z Economic Benefits and Returns to Rural Feeder Roads: Evidence from a Quasi-Experimental Setting in Ethiopia Stifel, David Minten, Bart Koru, Bethlehem transport costs infrastructure welfare households models Using an equivalent variation approach, we estimate households’ willingness-to-pay for rural feeder roads in Ethiopia. The problem of endogenous road placement is addressed by a purposeful data collection process as the survey site was chosen in such a way that the primary difference between households in the otherwise homogeneous region is that transport costs to the same market differ substantially within the region (most remote households have to walk eight hours to reach the market). Using this quasi-experimental setting, we compare the economic behavior of households by remoteness, allowing us to estimate the benefits of having access to feeder roads for rural households. We find that the benefits of reducing transportation costs by 50 US Dollars per metric ton for the most remote households would result in benefits worth roughly 35 percent of household consumption and that a hypothetical gravel road built halfway through the survey site that lasts 10 years will have an internal rate of return that ranges from 12 to 34 percent, using conservative assumptions. The lower range of estimates allows for transport services that are restricted to intermediate means of transport such as donkey-drawn carts. These results suggest that investments in rural feeder roads are cost-effective ways to help reduce widespread poverty even in unfavorable settings where (a) small-scale farmers have low levels of marketed agricultural surplus, (b) nonfarm earnings opportunities are negligible, and (c) the provision of motorized transport services is not guaranteed. 2012 2024-10-01T13:58:09Z 2024-10-01T13:58:09Z Working Paper https://hdl.handle.net/10568/153878 en Open Access application/pdf International Food Policy Research Institute Ethiopian Development Research Institute Stifel, David; Minten, Bart; Koru, Bethlehem 2012. Economic Benefits and Returns to Rural Feeder Roads: Evidence from a Quasi-Experimental Setting in Ethiopia. https://hdl.handle.net/10568/153878 |
| spellingShingle | transport costs infrastructure welfare households models Stifel, David Minten, Bart Koru, Bethlehem Economic Benefits and Returns to Rural Feeder Roads: Evidence from a Quasi-Experimental Setting in Ethiopia |
| title | Economic Benefits and Returns to Rural Feeder Roads: Evidence from a Quasi-Experimental Setting in Ethiopia |
| title_full | Economic Benefits and Returns to Rural Feeder Roads: Evidence from a Quasi-Experimental Setting in Ethiopia |
| title_fullStr | Economic Benefits and Returns to Rural Feeder Roads: Evidence from a Quasi-Experimental Setting in Ethiopia |
| title_full_unstemmed | Economic Benefits and Returns to Rural Feeder Roads: Evidence from a Quasi-Experimental Setting in Ethiopia |
| title_short | Economic Benefits and Returns to Rural Feeder Roads: Evidence from a Quasi-Experimental Setting in Ethiopia |
| title_sort | economic benefits and returns to rural feeder roads evidence from a quasi experimental setting in ethiopia |
| topic | transport costs infrastructure welfare households models |
| url | https://hdl.handle.net/10568/153878 |
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