Publication: On Measuring the Benefits of Lower Transport Costs
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Published
2009
ISSN
03043878
Date
2012-03-30
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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 $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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Publication On Measuring the Benefits of Lower Transport Costs(World Bank, Washington, DC, 2008-01)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.Publication The Poverty Impact of Rural Roads: Evidence from Bangladesh(2009)A rationale for public investment in rural roads is that households can better exploit agricultural and nonagricultural opportunities to employ labor and capital more efficiently. Significant knowledge gaps persist, however, as to how opportunities provided by roads actually filter back into household outcomes as well as distributional consequences. This study examines the impacts of two rural road-paving projects in Bangladesh using a new quasi-experimental household panel data set surveying project and control villages before and after program implementation. A household panel fixed-effects methodology controlling for initial area conditions is used to estimate the impact of paved roads on household and individual outcomes and account for potential bias in program placement at the village level. Rural road investments are found to reduce poverty significantly through higher agricultural production, lower input and transportation costs, and higher agricultural output prices at local village markets. Rural road development has also led to higher secondary schooling enrollment for boys and girls, as compared to primary school enrollment. We find that road investments have also benefited the poor, meaning the gains are significant for the poor and in some cases disproportionately higher than for the nonpoor.Publication Incentives, Supervision, and Sharecropper Productivity(2009)Though sharecropping remains widespread, its determinants are still poorly understood and the debate over the extent of moral hazard is far from settled. We address both issues by analyzing the role of landlord supervision. When landlords vary in their cost of supervision, otherwise identical share-tenants can have different productivity. Unique data on monitoring frequency collected from share-tenants in rural Pakistan confirms that, controlling for selection, 'supervised' tenants are significantly more productive than 'unsupervised' ones. Also, landlords' decisions regarding monitoring and incentives offered to tenants depend importantly on the cost of supervision.Publication Land Titles, Investment, and Agricultural Productivity in Madagascar : A Poverty and Social Impact Analysis(World Bank, Washington, DC, 2006-06)This report examines the question of land titling in Madagascar, a country where modern and informal tenure systems coexist and overlap to a significant extent. The report reviews three main arguments for land titling and their relevance for Madagascar in order to provide policy implications and evaluations. The first is that land titling serves as protection against expropriation. Second, titles may also facilitate land transactions. Last, that owning titled land improves access to formal credit or increases the volume of formal credit conditional on access. The report concludes that it is not obvious that expanded land titling, or community-based land registration, constitutes the best route to attaining distributional objectives, since wealth is increasing in landholdings. A cost benefit analysis based on the findings suggest that it would not be economical to expand the system of formal titling in rural Madagascar and that the three main arguments do not justify maintaining this system.Publication Multidimensionality and Renegotiation: Evidence from Transport-Sector Public-Private-Partnership Transactions in Latin America(2009)Multidimensional auctions are a natural, practical solution when governments pursue more than one objective in their public-private-partnership transactions. However, multi-criteria auctions seem difficult to implement and vulnerable to corruption and opportunistic behavior of both parties involved. Using data from road and railway concessions in Latin America, the paper examines the probability of renegotiation in connection with the selected award criteria. It shows that auctioneers tend to adopt the multidimensional format when the need for social considerations, such as alleviation of unemployment, is high. But more renegotiations would likely happen when the multidimensional format is used. Good governance, particularly regulatory quality and anti-corruption policies, can mitigate the renegotiation problem.
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