Are Rural Road Investments Alone Sufficient to Generate Transport Flows? Lessons from a Randomized Experiment in Rural Malawi and Policy Implications

24 Pages Posted: 20 Apr 2016

See all articles by Gaël Raballand

Gaël Raballand

World Bank

Rebecca L. Thornton

University of Illinois at Urbana-Champaign, Department of Economics, Students

Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy; National Bureau of Economic Research (NBER); University of Michigan at Ann Arbor - Department of Economics

Jessica Goldberg

University of Maryland, Department of Economics

Niall C. Keleher

Innovations for Poverty Action

Annika Mueller

University of Michigan at Ann Arbor - Department of Economics

Date Written: January 1, 2011

Abstract

This paper draws lessons from an original randomized experiment in Malawi. In order to understand why roads in relatively good condition in rural areas may not be used by buses, a minibus service was subsidized over a six-month period over a distance of 20 kilometers to serve five villages. Using randomly allocated prices for use of the bus, this experiment demonstrates that at very low prices, bus usage is high. Bus usage decreases rapidly with increased prices. However, based on the results on take-up and minibus provider surveys, the experiment demonstrates that at any price, low (with high usage) or high (with low usage), a bus service provider never breaks even on this road. This can contribute to explain why walking or cycling is so widespread on most rural roads in Sub-Saharan Africa. In terms of policy implications, this experiment explains that motorized services need to be subsidized; otherwise a road in good condition will most probably not lead to provision of service at an affordable price for the local population.

Keywords: Transport Economics Policy & Planning, Transport in Urban Areas, Urban Transport, Markets and Market Access, Rural Roads & Transport

Suggested Citation

Raballand, Gael and Thornton, Rebecca L. and Yang, Dean and Yang, Dean and Goldberg, Jessica and Keleher, Niall C. and Mueller, Annika, Are Rural Road Investments Alone Sufficient to Generate Transport Flows? Lessons from a Randomized Experiment in Rural Malawi and Policy Implications (January 1, 2011). World Bank Policy Research Working Paper No. 5535, Available at SSRN: https://ssrn.com/abstract=1747438

Gael Raballand (Contact Author)

World Bank ( email )

1818 H street N.W.
Washington, DC 20433
United States

Rebecca L. Thornton

University of Illinois at Urbana-Champaign, Department of Economics, Students ( email )

Champaign, IL
United States

Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy ( email )

440 Lorch Hall
611 Tappan Street
Ann Arbor, MI 48109
United States
734-764-6158 (Phone)

HOME PAGE: http://www.umich.edu/~deanyang/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Michigan at Ann Arbor - Department of Economics

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

Jessica Goldberg

University of Maryland, Department of Economics ( email )

College Park, MD 20742
United States

Niall C. Keleher

Innovations for Poverty Action ( email )

1731 Connecticut Ave, 4th floor
New Haven, CT 20009
United States

HOME PAGE: http://poverty-action.org

Annika Mueller

University of Michigan at Ann Arbor - Department of Economics ( email )

Ann Arbor, MI
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
223
Abstract Views
2,331
Rank
247,345
PlumX Metrics