The social profitability of rural roads in a small open economy: Do urban agglomeration economies matter?

Clive Bell

No wp-2020-137, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: In the presence of agglomeration economies, the effects of a rural roads programme depend not only on the reduction in transportation costs, but also on the form of labour mobility. When financed by a poll tax on rural households, the wage will rise, accompanied by some return migration, provided both cross-price effects in production and consumption and agglomeration economies are sufficiently small. With empirically plausible elasticities of agglomeration economies, urban households may be worse off.

Keywords: Rural roads; Profitability; Transportation; Agglomeration (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-geo, nep-tre and nep-ure
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Journal Article: The social profitability of rural roads in a small open economy: Do urban agglomeration economies matter? (2022)
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