IDEAS home Printed from
   My bibliography  Save this paper

Eliminating Uncertainty in Market Access: The Impact of New Bridges in Rural Nicaragua


  • Kevin Donovan

    (University of Notre Dame)

  • Wyatt Brooks

    (University of Notre Dame)


We estimate the impact of new bridges in rural Nicaraguan villages facing seasonal floods that unpredictably eliminate access to outside markets. We collect detailed annual household surveys over three years and conduct weekly telephone followups with a subset of households for sixty-four weeks, both before and after construction. This information is collected in villages where bridges are built, and in comparable villages where no bridge was built for only engineering-related reasons. We find that bridges eliminate uncertainty in market access driven by floods: in absence of a bridge, household income falls significantly during floods. Bridges completely eliminate this effect. Compared to households in villages where no bridges are built, bridges cause substantial reallocation of activities between farming and wage work. There are also significant effects on agricultural choices: increased fertilizer spending, increased yields on farms, and lower crop storage. We develop a model of occupational choice and risky farm investment, and show that these results are a rational response to reduced market income risk from the bridges. We provide evidence that these results are not due to lower trade costs outside of flooding periods, nor due to looser collateral constraints.

Suggested Citation

  • 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.
  • Handle: RePEc:red:sed017:1607

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Dean Karlan & Robert Osei & Isaac Osei-Akoto & Christopher Udry, 2014. "Agricultural Decisions after Relaxing Credit and Risk Constraints," The Quarterly Journal of Economics, Oxford University Press, vol. 129(2), pages 597-652.
    2. Eva Van Leemput, 2016. "A Passage to India : Quantifying Internal and External Barriers to Trade," International Finance Discussion Papers 1185, Board of Governors of the Federal Reserve System (U.S.).
    3. Restuccia, Diego & Yang, Dennis Tao & Zhu, Xiaodong, 2008. "Agriculture and aggregate productivity: A quantitative cross-country analysis," Journal of Monetary Economics, Elsevier, vol. 55(2), pages 234-250, March.
    4. Mark Rosenzweig & Christopher Udry, 2016. "External Validity in a Stochastic World," Working Papers id:11134, eSocialSciences.
    5. Jose Asturias & Manuel García-Santana & Roberto Ramos, 2019. "Competition and the Welfare Gains from Transportation Infrastructure: Evidence from the Golden Quadrilateral of India," Journal of the European Economic Association, European Economic Association, vol. 17(6), pages 1881-1940.
    6. Douglas Gollin & David Lagakos & Michael E. Waugh, 2014. "The Agricultural Productivity Gap," The Quarterly Journal of Economics, Oxford University Press, vol. 129(2), pages 939-993.
    7. Gollin, Douglas & Rogerson, Richard, 2014. "Productivity, transport costs and subsistence agriculture," Journal of Development Economics, Elsevier, vol. 107(C), pages 38-48.
    Full references (including those not matched with items on IDEAS)


    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. “Eliminating Uncertainty in Market Access: The Impact of New Bridges in Rural Nicaragua,” W. Brooks & K. Donovan (2018)
      by afinetheorem in A Fine Theorem on 2018-07-24 07:46:30


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Evan Thomas, 2019. "Toward a New Field of Global Engineering," Sustainability, MDPI, Open Access Journal, vol. 11(14), pages 1-11, July.
    2. Agha Ali Akram & Shyamal Chowdhury & Ahmed Mushfiq Mobarak, 2017. "Effects of Emigration on Rural Labor Markets," NBER Working Papers 23929, National Bureau of Economic Research, Inc.
    3. Wouter (W.) Zant, 2017. "Bridges," Tinbergen Institute Discussion Papers 17-117/V, Tinbergen Institute, revised 06 Apr 2019.

    More about this item


    Access and download statistics


    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:red:sed017:1607. 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: (Christian Zimmermann). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.