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The benefits of rural roads. Enhancing income opportunities for the rural poor

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Abstract

Most studies have measured the benefits of rehabilitated rural roads by focusing on reductions in monetary or time costs needed to access product and factor markets or key public social services. This paper complements these studies by evaluating their impact on key welfare indicators such as income or consumption. Looking at rural households living in some of the poorest districts of Peru, this study compares (using propensity score matching techniques) households located near rehabilitated roads to suitable controls. Results show that rehabilitated road accessibility can be related to changes in income sources, as the rehabilitated road enhances non-agricultural income opportunities, especially from wage-employment sources. The study also finds that income expansion is not been matched by an equivalent consumption increase; apparently because the additional income is allocated to savings, through increments in livestock, most likely because road quality improvement is being perceived as transitory.

Suggested Citation

  • Javier Escobal & Carmen Ponce, 2003. "The benefits of rural roads. Enhancing income opportunities for the rural poor," Documentos de Investigación dt40b, Grupo de Análisis para el Desarrollo (GRADE).
  • Handle: RePEc:gad:doctra:dt40b
    Note: Documento de trabajo, 40-I
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    File URL: http://www.grade.org.pe/download/pubs/ddt/ddt40EN.pdf
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    Keywords

    Carreteras; Ingresos de hogares; Empleo; Zonas rurales; Roads; Household income; Employment Rural areas; Peru;

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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