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

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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.

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  • Dumas, Christelle & Játiva, Ximena, 2020. "Better roads, better off? Evidence on improving roads in Tanzania," FSES Working Papers 518, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    • Handle: RePEc:fri:fribow:fribow00518
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    More about this item

    Keywords

    Roads; Poverty; Rural households; Africa;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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