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Roads, Participation in Markets, and Benefits to Agricultural Households: Evidence from the Topography-Based Highway Network in Nepal

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  • Slesh A. Shrestha

Abstract

This paper identifies the role of roads in improving agricultural livelihoods and examines the key market mechanisms through which improved connectivity translates into economic gains for agricultural households. I use a rigorous identification strategy based on the rugged terrain that significantly influences the design and costs of constructing roads in Nepal, along with new geospatial data to find a positive impact of roads on farmland values. A 1% decrease in distance to a road raises the market price of an agricultural plot from 0.1% to 0.25%. This increase in land value is underpinned by increased participation by households in agricultural markets and improved farm production and incomes. The results also suggest that a decrease in the distance to a road contributes to the commercialization of agriculture and increases the use of fertilizer in agricultural production, thus reducing the unit cost of fertilizers.

Suggested Citation

  • Slesh A. Shrestha, 2020. "Roads, Participation in Markets, and Benefits to Agricultural Households: Evidence from the Topography-Based Highway Network in Nepal," Economic Development and Cultural Change, University of Chicago Press, vol. 68(3), pages 839-864.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/702226
    DOI: 10.1086/702226
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    Cited by:

    1. Wenmei Guo & Veeshan Rayamajhee & Alok K. Bohara, 2023. "Impacts of climate change on food utilization in Nepal," Review of Development Economics, Wiley Blackwell, vol. 27(1), pages 630-659, February.
    2. Bensch, Gunther & Gotz, Gunnar & Peters, Jörg, 2020. "Effects of rural electrification on employment: A comment on Dinkelman (2011)," Ruhr Economic Papers 840, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. Sharma, Hari, 2020. "The effect of emigration and remittances on labour supply of the left-behind: Evidence from Nepal," MPRA Paper 102091, University Library of Munich, Germany.
    4. Songsermsawas, Tisorn & Kafle, Kashi & Winters, Paul, 2023. "Decomposing the impacts of an agricultural value chain development project by ethnicity and gender in Nepal," World Development, Elsevier, vol. 168(C).
    5. Kafle, Kashi & Songsermsawas, Tisorn & Winters, Paul, 2021. "IFAD Research Series Issue 65 - Impacts of agricultural value chain development in a mountainous region: Evidence from Nepal," IFAD Research Series 311008, International Fund for Agricultural Development (IFAD).
    6. Kafle, Kashi & Songsermsawas, T. & Winters, P., 2021. "Impacts of agricultural value chain development in a mountainous region: evidence from Nepal," IWMI Books, Reports H050432, International Water Management Institute.
    7. Hayakawa, Kazunobu & Keola, Souknilanh & Sudsawasd, Sasatra & Yamanouchi, Kenta, 2022. "Impacts of an international bridge on households: Evidence from Thailand," Journal of Asian Economics, Elsevier, vol. 83(C).
    8. Kashi Kafle & Tisorn Songsermsawas & Paul Winters, 2022. "Agricultural value chain development in Nepal: Understanding mechanisms for poverty reduction," Agricultural Economics, International Association of Agricultural Economists, vol. 53(3), pages 356-373, May.
    9. Subedi, Yuba Raj & Kristiansen, Paul & Cacho, Oscar, 2022. "Reutilising abandoned cropland in the Hill agroecological region of Nepal: Options and farmers’ preferences," Land Use Policy, Elsevier, vol. 117(C).
    10. Wonchul Kim & Sung Hyo Hong, 2022. "An Empirical Analysis of the Benefits of Opening a Highway in Terms of Changes in Housing Prices," Sustainability, MDPI, vol. 14(9), pages 1-11, May.
    11. Neubauer, Florian & Songsermsawas, Tisorn & Kámiche-Zegarra, Joanna N. & Bravo-Ureta, Boris E., 2021. "Technology and Technical Efficiency Gaps Correcting for Selectivity Bias: A Preliminary Analysis from a Value Chain Project in Nepal," 2021 Conference, August 17-31, 2021, Virtual 314979, International Association of Agricultural Economists.
    12. Yanyan Gao & Xinping Wang, 2023. "Chinese agriculture in the age of high‐speed rail: Effects on agricultural value added and food output," Agribusiness, John Wiley & Sons, Ltd., vol. 39(2), pages 387-405, March.
    13. Neubauer, Florian & Songsermsawas, Tisorn & Kámiche-Zegarra, Joanna & Bravo-Ureta, Boris E., 2022. "Technical efficiency and technological gaps correcting for selectivity bias: Insights from a value chain project in Nepal," Food Policy, Elsevier, vol. 112(C).
    14. Songsermsawas, Tisorn & Kafle, Kashi & Winters, Paul, 2021. "Decomposing the Impacts of an Agricultural Value Chain Investment by Gender and Ethnicity: The case of Nepal," 2021 Conference, August 17-31, 2021, Virtual 315047, International Association of Agricultural Economists.
    15. Kebede, Hundanol A., 2022. "Market integration and separability of production and consumption decisions in farm households," Journal of Development Economics, Elsevier, vol. 158(C).

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