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
Naod Mekonnen Anega; Bamlaku Alemu
Abstract:
Purpose
This study empirically examines the impact of rural roads on consumption of households in Ethiopia.
Design/methodology/approach
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.
Findings
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.
Research limitations/implications
Improving rural roads to a level of all-weather road standards and provision of agricultural transport facilities should be strategic priorities.
Originality/value
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