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Road Maintenance and Local Economic Development: Evidence from Indonesia's Highways / Paul Gertler, Marco Gonzalez-Navarro, Tadeja Gracner, Alexander D. Rothenberg.
- Format:
- Book
- Author/Creator:
- Gertler, Paul.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w30454.
- NBER working paper series no. w30454
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2022.
- Summary:
- This paper estimates the local welfare impacts of highway maintenance investments. We instrument road quality exploiting Indonesia's two-step budgeting process for allocating funding to local road authorities. Using comprehensive data on road quality from 1990-2007, we find evidence that better roads help manufacturers create new jobs, enabling worker transitions out of informal employment, and increasing labor income. Road quality also changes the cost of living, reducing perishable food prices but also raising housing prices. We estimate the elasticity of household welfare with respect to road quality to be 0.09 and the benefit/cost ratio for road maintenance investments to be 1.8.
- Notes:
- Print version record
- September 2022.
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