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On Measuring the Benefits of Lower Transport Costs / Jacoby, Hanan G.
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Jacoby, Hanan G.
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- High transport.
- Infrastructure investment.
- Road.
- Road improvement.
- Road projects.
- Rural infrastructure.
- Rural roads.
- Transport.
- Transport Costs.
- Transport Economics, Policy and Planning.
- Transport infrastructure.
- Local Subjects:
- High transport.
- Infrastructure investment.
- Road.
- Road improvement.
- Road projects.
- Rural infrastructure.
- Rural roads.
- Transport.
- Transport Costs.
- Transport Economics, Policy and Planning.
- Transport infrastructure.
- Physical Description:
- 1 online resource (33 pages)
- Place of Publication:
- Washington, D.C., The World Bank, 2008
- System Details:
- data file
- Summary:
- Despite large amounts invested in rural roads in developing countries, little is known about their benefits. This paper derives an expression for the willingness-to-pay for a reduction in transport costs from the canonical agricultural household model and uses it to estimate the benefits of a hypothetical road project. Estimation is based on novel cross-sectional data collected in a small region of Madagascar with enormous, yet plausibly exogenous, variation in transport cost. A road that essentially eliminated transport costs in the study area would boost the incomes of the remotest households-those facing transport costs of about USD 75/ton-by nearly half, mostly by raising non-farm earnings. This benefit estimate is contrasted to one based on a hedonic approach.
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