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Farther on down the Road: Transport Costs, Trade and Urban Growth in Sub-Saharan Africa

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  • Adam Storeygard

Abstract

This article investigates the role of intercity transport costs in determining the income of sub-Saharan African cities. In particular, focusing on fifteen countries whose largest city is a port, I find that an oil price increase of the magnitude experienced between 2002 and 2008 induces the income of cities near that port to increase by 7% relative to otherwise identical cities 500 km farther away. Combined with external estimates, this implies an elasticity of city economic activity with respect to transport costs of −0.28 at 500 km from the port. Moreover, the effect differs by the surface of roads between cities. Cities connected to the port by paved roads are chiefly affected by transport costs to the port, while cities connected to the port by unpaved roads are more affected by connections to secondary centres.

Suggested Citation

  • Adam Storeygard, 2016. "Farther on down the Road: Transport Costs, Trade and Urban Growth in Sub-Saharan Africa," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 83(3), pages 1263-1295.
    • Handle: RePEc:oup:restud:v:83:y:2016:i:3:p:1263-1295.
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    File URL: http://hdl.handle.net/10.1093/restud/rdw020
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    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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