Journal of Economics and Development, Vol. 25 No. 3, pp. 186-204. https://doi.org/10.1108/JED-10-2022-0213
The effect of rural roads on consumption in Ethiopia
This study empirically examines the impact of rural roads on consumption of households in Ethiopia.
Both descriptive statistics and econometric techniques are used to address the aforementioned objective. Specifically, quantile regression, fixed- and random-effect models are used to understand the impact of rural road quality on welfare.
The econometric analysis revealed that improving the quality of rural roads and/or creating access to all-weather roads raises households' average real consumption per capita by as much as 10%. The other transport indicator – mode of transport – also has a positive effect on real consumption per capita. The result indicated that real consumption per capita for households using the traditional mode of transport would increase by as much as 7% compared to those using foot as a major mode of transport. However, the fixed quantile estimation result revealed that rural road access has a positive and significant effect on consumption per capita only for the 0.8th and 0.9th percentiles, indicating that the access to roads is not pro-poor.
Improving rural roads to a level of all-weather road standards and provision of agricultural transport facilities should be strategic priorities.
This study provides empirical evidence pertinent to the effect rural mobility has on the consumption of households as well as the pro-poorness of such investments in rural settings.
Keywords:Rural road transport, Access to all-weather roads, Pro-poor growth, Mode of transport, Quantile regression, Consumption per capita, Fixed effects, Random effects