Rural Road Improvements and Local Agricultural Intensification: A Remote Sensing Evaluation in Mozambique
Abstract: Transaction costs serve as an obstacle to competitive market exchanges in rural and remote areas around the world. Improvements to transportation infrastructure are hypothesized to lower these costs and help alleviate poverty among smallholder farmers. Yet, few empirical studies estimate the effect of improved rural infrastructure on agricultural output, especially in the sub-Saharan context. This thesis investigates whether rural road upgrades in northern Mozambique have any short-term effects on agricultural output; specifically, we evaluate the early effects of an ongoing World Bank project. By employing remote sensing and machine learning methods, we identify rural road upgrades that took place between 2018 and 2021. Using a differences-in-differences approach, we find that areas in immediate proximity to roads that received an upgrade did not experience changes in agricultural output, compared to areas that did not receive an upgrade. We restrict the sample and find a significant increase in agricultural output, although not robust. Future research should consider the medium- and long-term impact of rural road upgrades for the complete picture to emerge. While sole dependence on remote sensing data remains a challenge in economics, it is a promising avenue for future research, particularly in contexts where comprehensive survey data is lacking.
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