IDEAS home Printed from https://ideas.repec.org/p/tin/wpaper/20170117.html
   My bibliography  Save this paper

Bridges

Author

Listed:
  • Wouter (W.) Zant

    (VU Amsterdam, The Netherlands; Tinbergen Institute, The Netherlands)

Abstract

We use spatial maize prices to estimate to what extent bridges in Mozambique lead to transport cost reductions and attribute these reductions to road distance and road quality. The applied methodology allows for potentially oligopolistic traders with spatially varying mark-ups. For identification we exploit the introduction of a road bridge over the Zambezi river, which creates variation in trading itineraries between markets. Estimations are based on monthly maize prices, in 24 markets, for five years before and after the introduction of the bridge. Estimates of the reduction of transport costs, averaged over itineraries, vary from 6% to 10%. Results are robust for non-random bridge placement and various other threats, and supported by observed transport cost data. Reduction in transport costs for particular itineraries varies more (up to 21%) and is roughly for two-third due to road distance and for one-third due to road quality.

Suggested Citation

  • Wouter (W.) Zant, 2017. "Bridges," Tinbergen Institute Discussion Papers 17-117/V, Tinbergen Institute, revised 06 Apr 2019.
    • Handle: RePEc:tin:wpaper:20170117
    as

    Download full text from publisher

    File URL: https://papers.tinbergen.nl/17117.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Renkow, Mitch & Hallstrom, Daniel G. & Karanja, Daniel D., 2004. "Rural infrastructure, transactions costs and market participation in Kenya," Journal of Development Economics, Elsevier, vol. 73(1), pages 349-367, February.
    2. Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
    3. Jonathan Kaminski & Luc Christiaensen & Christopher L. Gilbert, 2016. "Seasonality in local food markets and consumption: evidence from Tanzania," Oxford Economic Papers, Oxford University Press, vol. 68(3), pages 736-757.
    4. Wouter Zant, 2013. "How Is the Liberalization of Food Markets Progressing? Market Integration and Transaction Costs in Subsistence Economies," The World Bank Economic Review, World Bank, vol. 27(1), pages 28-54.
    5. Gita Gopinath & Pierre-Olivier Gourinchas & Chang-Tai Hsieh & Nicholas Li, 2011. "International Prices, Costs, and Markup Differences," American Economic Review, American Economic Association, vol. 101(6), pages 2450-2486, October.
    6. Banerjee, Abhijit & Duflo, Esther & Qian, Nancy, 2020. "On the road: Access to transportation infrastructure and economic growth in China," Journal of Development Economics, Elsevier, vol. 145(C).
    7. Minten, Bart & Kyle, Steven, 1999. "The effect of distance and road quality on food collection, marketing margins, and traders' wages: evidence from the former Zaire," Journal of Development Economics, Elsevier, vol. 60(2), pages 467-495, December.
    8. Mahbub Morshed, A. K. M., 2003. "What can we learn from a large border effect in developing countries?," Journal of Development Economics, Elsevier, vol. 72(1), pages 353-369, October.
    9. Fackler, Paul L. & Goodwin, Barry K., 2001. "Spatial price analysis," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 17, pages 971-1024, Elsevier.
    10. Kevin Donovan & Wyatt Brooks, 2017. "Eliminating Uncertainty in Market Access: The Impact of New Bridges in Rural Nicaragua," 2017 Meeting Papers 1607, Society for Economic Dynamics.
    11. David H. Autor, 2003. "Outsourcing at Will: The Contribution of Unjust Dismissal Doctrine to the Growth of Employment Outsourcing," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 1-42, January.
    12. repec:nbr:nberch:13946 is not listed on IDEAS
    13. Jacoby, Hanan G. & Minten, Bart, 2009. "On measuring the benefits of lower transport costs," Journal of Development Economics, Elsevier, vol. 89(1), pages 28-38, May.
    14. Xavier Cirera & Channing Arndt, 2008. "Measuring the impact of road rehabilitation on spatial market efficiency in maize markets in Mozambique," Agricultural Economics, International Association of Agricultural Economists, vol. 39(1), pages 17-28, July.
    15. Steven Were Omamo, 1998. "Transport Costs and Smallholder Cropping Choices: An Application to Siaya District, Kenya," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 116-123.
    16. Volpe Martincus, Christian & Carballo, Jerónimo & Cusolito, Ana, 2017. "Roads, exports and employment: Evidence from a developing country," Journal of Development Economics, Elsevier, vol. 125(C), pages 21-39.
    17. Robert Jensen, 2007. "The Digital Provide: Information (Technology), Market Performance, and Welfare in the South Indian Fisheries Sector," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 879-924.
    18. Wouter Zant, 2017. "Impact of Mobile Phones on Staple Food Markets in Mozambique: Improved Arbitrage or Increased Rent Extraction?," Tinbergen Institute Discussion Papers 17-021/V, Tinbergen Institute, revised 26 Jan 2018.
    19. Jacoby, Hanan C, 2000. "Access to Markets and the Benefits of Rural Roads," Economic Journal, Royal Economic Society, vol. 110(465), pages 713-737, July.
    20. Tschirley, David L. & Abdula, Danilo Carimo & Weber, Michael T., 2006. "Toward Improved Maize Marketing and Trade Policies to Promote Household Food Security in Central and Southern Mozambique," Food Security Collaborative Working Papers 56065, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    21. Mahbub Morshed, A.K.M., 2007. "Is there really a "border effect"?," Journal of International Money and Finance, Elsevier, vol. 26(7), pages 1229-1238, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wouter Zant, 2022. "Measuring Trade Cost Reductions Through a New Bridge in Mozambique: Who Benefits From Transport Infrastructure?," Journal of African Economies, Centre for the Study of African Economies, vol. 31(4), pages 384-408.
    2. Wouter Zant, 2018. "Mobile Phones and Mozambique Farmers: Less Asymmetric Information and More Trader Competition?," Tinbergen Institute Discussion Papers 18-055/V, Tinbergen Institute, revised 27 Oct 2019.
    3. Wouter Zant, 2016. "How does Market Access for Smallholders affect Export Supply? The Case of Tobacco Marketing in Malawi," Tinbergen Institute Discussion Papers 16-054/V, Tinbergen Institute, revised 08 Aug 2018.
    4. Wouter Zant, 2012. "How does Market Access affect Smallholder Behavior? The Case of Tobacco Marketing in Malawi," Tinbergen Institute Discussion Papers 12-088/V, Tinbergen Institute, revised 25 Aug 2014.
    5. Vandercasteelen, Joachim & Beyene, Seneshaw Tamru & Minten, Bart & Swinnen, Johan, 2018. "Cities and agricultural transformation in Africa: Evidence from Ethiopia," World Development, Elsevier, vol. 105(C), pages 383-399.
    6. Claudia N. Berg & Uwe Deichmann & Yishen Liu & Harris Selod, 2017. "Transport Policies and Development," Journal of Development Studies, Taylor & Francis Journals, vol. 53(4), pages 465-480, April.
    7. Wouter Zant, 2019. "Mobile Phones and Mozambique Traders: What is the Size of Reduced Search Costs and Who Benefits?," Tinbergen Institute Discussion Papers 19-047/V, Tinbergen Institute.
    8. Aggarwal, Shilpa, 2018. "Do rural roads create pathways out of poverty? Evidence from India," Journal of Development Economics, Elsevier, vol. 133(C), pages 375-395.
    9. Ebata, Ayako & Velasco, Pamela & von Cramon-Taubadel, Stephan, 2015. "Distance to market and farm-gate prices of staple beans in rural Nicaragua," GlobalFood Discussion Papers 197540, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    10. Joachim Vandercasteelen & Seneshaw Tamru & Bart Minten & Johan Swinnen, 2017. "Secondary towns, agricultural prices, and intensification: Evidence from Ethiopia," LICOS Discussion Papers 39317, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    11. Wouter Zant, 2018. "Trains, Trade, and Transaction Costs: How Does Domestic Trade by Rail Affect Market Prices of Malawi Agricultural Commodities?," The World Bank Economic Review, World Bank, vol. 32(2), pages 334-356.
    12. Ebata, Ayako & Pacheco, Pamela Alejandra & Cramon-Taubadel, Stephan von, 2015. "Distance to market and farm-gate prices of staple beans in rural Nicaragua," 2015 Conference, August 9-14, 2015, Milan, Italy 211582, International Association of Agricultural Economists.
    13. Elodie Djemai & Andrew E. Clark & Conchita D'Ambrosio, 2020. "Take the Highway? Paved Roads and Well-Being in Africa," Working Papers DT/2020/11, DIAL (Développement, Institutions et Mondialisation).
    14. Elodie Djemai & Andrew E. Clark & Conchita D'Ambrosio, 2020. "Take the Highway? Paved Roads and Well-Being in Africa," Working Papers DT/2020/11, DIAL (Développement, Institutions et Mondialisation).
    15. Escobal, Javier, 2005. "The Role of Public Infraestructure in Market Development in Rural Peru," MPRA Paper 727, University Library of Munich, Germany.
    16. B.C. Okoye & A. Abass & B. Bachwenkizi & G. Asumugha & B. Alenkhe & R. Ranaivoson & R. Randrianarivelo & N. Rabemanantsoa & I. Ralimanana, 2016. "Effect of transaction costs on market participation among smallholder cassava farmers in Central Madagascar," Cogent Economics & Finance, Taylor & Francis Journals, vol. 4(1), pages 1143597-114, December.
    17. Robinson, Amanda Lea, 2016. "Internal Borders: Ethnic-Based Market Segmentation in Malawi," World Development, Elsevier, vol. 87(C), pages 371-384.
    18. Wouter Zant, 2022. "Two Birds with One Stone: Technology Adoption and Market Participation through Protection against Crop Failure," Tinbergen Institute Discussion Papers 22-091/V, Tinbergen Institute.
    19. Ulimwengu, John & Funes, Jose & Headey, Derek & You, Liangzhi, 2009. "Paving the way for development?: The impact of transport infrastructure on agricultural production and poverty reduction in the Democratic Republic of Congo," IFPRI discussion papers 944, International Food Policy Research Institute (IFPRI).
    20. Marie-Francoise Calmette & Maureen Kilkenny, 2012. "Rural roads versus African famines," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(2), pages 373-396, October.

    More about this item

    Keywords

    agricultural markets; transport costs; bridges; Mozambique; sub-Sahara Africa;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tin:wpaper:20170117. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tinbergen Office +31 (0)10-4088900 (email available below). General contact details of provider: https://edirc.repec.org/data/tinbenl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.