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Better roads, better off? Evidence on improving roads in Tanzania

Christelle Dumas () and Ximena Játiva ()
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Ximena Játiva: Faculty of Economics and Social Sciences, Postal: Bd de Pérolles 90, CH-1700 Fribourg, http://www.unifr.ch/ses/

No 518, FSES Working Papers from Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland

Abstract: Spatial isolation is considered as one of the main determinants of poverty. Therefore, many transport investments are undertaken with a stated objective of poverty reduction. In our paper, we evaluate a Tanzanian program that rehabilitated 2500km of major roads between 2008 and 2013. We deal with endogenous placement issues with a household fixed-effect strategy combined with a propensity score matching. Contrary to most studies, we find damaging effects of the road on the rural population: the price of the main product (rice) decreases, they reduce rice production and reallocate labor away from farm but opportunities of o_-farm work are scarce. This results in depressed wages and households declare a lower satisfaction. This is consistent with a situation where rural households face an increased competition due to lower transportation costs.

Keywords: Roads; Poverty; Rural households; Africa (search for similar items in EconPapers)
JEL-codes: O12 O13 J43 O15 O18 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2020-09-16
New Economics Papers: this item is included in nep-agr, nep-dev, nep-tre and nep-ure
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