Market Access, Trade Costs, and Technology Adoption: Evidence from Northern Tanzania

Shilpa Aggarwal, Brian Giera, Dahyeon Jeong, Jonathan Robinson and Alan Spearot
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Shilpa Aggarwal: Indian School of Business and J-PAL
Brian Giera: Amazon Research
Dahyeon Jeong: World Bank
Alan Spearot: UCSC

The Review of Economics and Statistics, 2024, vol. 106, issue 6, 1511-1528

Abstract: We collect data on prices, travel costs, and farmer decisions to quantify market access for chemical fertilizer and its impact on agricultural productivity in 1,180 villages in Northern Tanzania. Villages at the bottom of the travel cost-adjusted input price distribution face 40%–55% less favorable prices than those at the top. A standard deviation increase in village-level remoteness is associated with 20%–25% lower input adoption. A spatial model of input adoption conservatively estimates that total trade costs are 4 times pecuniary travel costs. Counterfactuals suggest that halving travel costs would more than double adoption and reduce the adoption-remoteness gradient by 63%.

Date: 2024
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https://doi.org/10.1162/rest_a_01263
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Working Paper: Market Access, Trade Costs, and Technology Adoption: Evidence from Northern Tanzania (2018)
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