The Role of Infrastructure in Mitigating Poverty Dynamics: The Case of an Irrigation Project in Sri Lanka
Although it is known that access to physical infrastructure enhances household welfare, there are hardly any micro-econometric studies that analyze the role of infrastructure in mitigating chronic and transient poverty. This paper aims to bridge this gap in the existing literature by evaluating the impact of a large-scale irrigation project implemented in Sri Lanka. We extend the seasonal consumption smoothing model of Paxson (1993) by introducing endogenous credit constraints. We collected unique household-level monthly panel data over a period of two years. According to the point estimates, with irrigation accessibility, per capita food and non-food consumption expenditures increase by around 20% and 45%, respectively, on average, and the probability of binding credit constraint is reduced by 5.6% during the dry season. The latter result implies that irrigation enhances households’ access to the credit market which, in turn, contributes to further reduction in transient poverty. These empirical results suggest that irrigation infrastructure has a positive impact on reducing both chronic and transient poverty. The structural estimation results support the validity of our theoretical framework.
|Date of creation:||2009|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.iaae-agecon.org/|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Takashi Kurosaki, 2006. "The measurement of transient poverty: Theory and application to Pakistan," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 4(3), pages 325-345, December.
- Abhijit Vinayak Banerjee & Alice H. Amsden & Robert H. Bates & Jagdish Bhagwati & Angus Deaton & Nicholas Stern, 2007. "Making Aid Work," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262026155, March.
- Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-33, June.
- Jacoby, Hanan C, 2000.
"Access to Markets and the Benefits of Rural Roads,"
Royal Economic Society, vol. 110(465), pages 713-37, July.
- Hahn, Jinyong, 1996. "A Note on Bootstrapping Generalized Method of Moments Estimators," Econometric Theory, Cambridge University Press, vol. 12(01), pages 187-197, March.
- Canning, David & Bennathan, Esra, 2000. "The social rate of return on infrastructure investments," Policy Research Working Paper Series 2390, The World Bank.
- Datt, Gaurav & Ravallion, Martin, 1996.
"Why have some Indian states done better than others at reducing rural poverty?,"
Policy Research Working Paper Series
1594, The World Bank.
- Datt, Gaurav & Ravallion, Martin, 1998. "Why Have Some Indian States Done Better Than Others at Reducing Rural Poverty?," Economica, London School of Economics and Political Science, vol. 65(257), pages 17-38, February.
- Xiaobo Zhang & Shenggen Fan, 2004.
"How Productive Is Infrastructure? A New Approach and Evidence from Rural India,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 86(2), pages 492-501.
- Zhang, Xiaobo & Fan, Shenggen, 2001. "How productive is infrastructure?: new approach and evidence from rural India," EPTD discussion papers 84, International Food Policy Research Institute (IFPRI).
- Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1988.
"Industrialization and the Big Push,"
NBER Working Papers
2708, National Bureau of Economic Research, Inc.
- Besley, Timothy & Coate, Stephen, 1992. "Workfare versus Welfare Incentive Arguments for Work Requirements in Poverty-Alleviation Programs," American Economic Review, American Economic Association, vol. 82(1), pages 249-61, March.
- Townsend, R.M., 1991.
"Risk and Insurance in Village India,"
University of Chicago - Economics Research Center
91-3, Chicago - Economics Research Center.
- Robert M. Townsend, . "Risk and Insurance in Village India," University of Chicago - Population Research Center 91-3a, Chicago - Population Research Center.
- Duflo, Esther & Glennerster, Rachel & Kremer, Michael, 2008.
"Using Randomization in Development Economics Research: A Toolkit,"
Handbook of Development Economics,
- Duflo, Esther & Glennerster, Rachel & Kremer, Michael, 2007. "Using Randomization in Development Economics Research: A Toolkit," CEPR Discussion Papers 6059, C.E.P.R. Discussion Papers.
- Esther Duflo & Rachel Glennerster & Michael Kremer, 2006. "Using Randomization in Development Economics Research: A Toolkit," NBER Technical Working Papers 0333, National Bureau of Economic Research, Inc.
- Jalan, Jyotsna & Ravallion, Martin, 2001.
"Does piped water reduce diarrhea for children in rural India ?,"
Policy Research Working Paper Series
2664, The World Bank.
- Jalan, Jyotsna & Ravallion, Martin, 2003. "Does piped water reduce diarrhea for children in rural India?," Journal of Econometrics, Elsevier, vol. 112(1), pages 153-173, January.
- Brockerhoff, Martin & Derose, Laurie F., 1996. "Child survival in East Africa: The impact of preventive health care," World Development, Elsevier, vol. 24(12), pages 1841-1857, December.
- Alderman, H. & Paxson, C.H., 1992.
"Do the Poor Insure? A Synthesis of the Literature on Risk and Consumption in Developing Countries,"
164, Princeton, Woodrow Wilson School - Development Studies.
- Alderman, Harold & Paxson, Christina H & DEC, 1992. "Do the poor insure? A synthesis of the literature on risk and consumption in developing countries," Policy Research Working Paper Series 1008, The World Bank.
- Paxson, Christina H, 1993.
"Consumption and Income Seasonality in Thailand,"
Journal of Political Economy,
University of Chicago Press, vol. 101(1), pages 39-72, February.
- Newey, W.K. & Powell, J.L. & Walker, J.R., 1990.
"Semiparametric Estimation Of Selection Models: Some Empirical Results,"
9001, Wisconsin Madison - Social Systems.
- Newey, Whitney K & Powell, James L & Walker, James R, 1990. "Semiparametric Estimation of Selection Models: Some Empirical Results," American Economic Review, American Economic Association, vol. 80(2), pages 324-28, May.
- Stephen Zeldes, .
"Consumption and Liquidity Constraints: An Empirical Investigation,"
Rodney L. White Center for Financial Research Working Papers
24-85, Wharton School Rodney L. White Center for Financial Research.
- Zeldes, Stephen P, 1989. "Consumption and Liquidity Constraints: An Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 305-46, April.
- Stephen P. Zeldes, . "Consumption and Liquidity Constraints: An Empirical Investigation," Rodney L. White Center for Financial Research Working Papers 16-88, Wharton School Rodney L. White Center for Financial Research.
- Timothy Besley & Robin Burgess, 2003. "Halving Global Poverty," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 3-22, Summer.
- Tullio Jappelli, 1990. "Who is Credit Constrained in the U. S. Economy?," The Quarterly Journal of Economics, Oxford University Press, vol. 105(1), pages 219-234.
- Van de Walle, D., 1996. "Infrastructure and Poverty in Vietnam," Papers 121, World Bank - Living Standards Measurement.
- Michael Lokshin & Ruslan Yemtsov, 2004. "Combining Longitudinal Household and Community Surveys for Evaluation of Social Transfers: infrastructure rehabilitation projects in rural Georgia," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 5(2), pages 265-277.
- 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.
- Jacoby, Hanan G. & Minten, Bart, 2008. "On measuring the benefits of lower transport costs," Policy Research Working Paper Series 4484, The World Bank.
- Flavin, Marjorie A, 1981. "The Adjustment of Consumption to Changing Expectations about Future Income," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 974-1009, October.
- Marcel Fafchamps, 2003. "Rural Poverty, Risk and Development," Books, Edward Elgar Publishing, number 3127, June.
- Dollar, David & Kraay, Aart, 2001.
"Growth is good for the poor,"
Policy Research Working Paper Series
2587, The World Bank.
- Ekaterini Kyriazidou, 1997. "Estimation of a Panel Data Sample Selection Model," Econometrica, Econometric Society, vol. 65(6), pages 1335-1364, November.
- Lung-Fei Lee, 1982. "Some Approaches to the Correction of Selectivity Bias," Review of Economic Studies, Oxford University Press, vol. 49(3), pages 355-372.
- Fan, Shenggen & Zhang, Xiaobo, 2004. "Infrastructure and regional economic development in rural China," China Economic Review, Elsevier, vol. 15(2), pages 203-214.
- Michael Lokshin & Ruslan Yemtsov, 2005. "Has Rural Infrastructure Rehabilitation in Georgia Helped the Poor?," World Bank Economic Review, World Bank Group, vol. 19(2), pages 311-333.
- Jalan, Jyotsna & Ravallion, Martin, 1998. "Transient Poverty in Postreform Rural China," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 338-357, June.
When requesting a correction, please mention this item's handle: RePEc:ags:iaae09:51461. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.