Estimating the Long-term Impacts of Rural Roads : A Dynamic Panel Approach

Infrastructure investments are typically long-term. As a result, observed benefits to households and communities may vary considerably over time as short-term outcomes generate or are subsumed by longer-term impacts. This paper uses a new round of...

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Main Authors:	Khandker, Shahidur R., Koolwal, Gayatri B.
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	AGRICULTURAL EMPLOYMENT AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AGRICULTURAL WAGE AGRICULTURE ASSET HOLDINGS ASSETS BENCHMARK BETTER ACCESS TO MARKETS BETTER ROAD BETTER ROADS BRIDGES CHRONIC ILLNESS COMMERCIAL BANKS COMMUNES COMMUNITIES COMMUNITY DEVELOPMENT COST PER TRIP CROP PRODUCTION CROP VARIETIES CULVERTS DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIMINISHING RETURNS DISTRIBUTIONAL EFFECTS DISTRIBUTIONAL OUTCOMES DISTRICTS DRAINAGE ECONOMETRICS ECONOMIC DEVELOPMENT ELASTICITY ENDOGENOUS VARIABLES FARM ACTIVITIES FARM ACTIVITY FARM EMPLOYMENT FARM INCOME FARM PRODUCTION FARM SECTOR FARM WORK FARM-GATE FEEDER ROADS FEMALE FOOD CONSUMPTION FOOD CONSUMPTION EXPENDITURE FOOD EXPENDITURE FOOD ITEMS HOSPITALS HOUSEHOLD CONSUMPTION HOUSEHOLD HEAD HOUSEHOLD SIZE HOUSEHOLD SURVEY HOUSEHOLD WELFARE HOUSEHOLDS IMPACT ON POVERTY INCOME INCOME GAINS INCOME GROUPS INCOME GROWTH INCREASING RETURNS INEQUALITY INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE REHABILITATION INTEREST RATE INTERVENTION INVESTMENT IN ROADS LAND ASSETS LANDHOLDINGS LENGTH OF ROAD LOCALITIES MOBILITY MOBILITY OF LABOR MODES OF TRANSPORT NONFARM INCOME POLITICAL INFLUENCE POOR POOR AREAS POOR HOUSEHOLDS POSITIVE EFFECTS POVERTY IMPACT POVERTY LINE POVERTY REDUCTION PRICE FLUCTUATIONS PRICE LEVELS PUBLIC ROAD RECONSTRUCTION REGRESSION ANALYSIS ROAD ROAD ACCESS ROAD CONSTRUCTION ROAD DEVELOPMENT ROAD IMPROVEMENT ROAD IMPROVEMENTS ROAD INVESTMENT ROAD NETWORK ROAD QUALITY RURAL RURAL COMMUNITY RURAL DEVELOPMENT RURAL HOUSEHOLDS RURAL INCOME RURAL INFRASTRUCTURE RURAL INFRASTRUCTURE DEVELOPMENT RURAL ROAD RURAL ROAD IMPROVEMENTS RURAL ROAD INVESTMENT RURAL ROAD INVESTMENTS RURAL ROAD REHABILITATION RURAL ROADS TARGETING TRANSPORT TRANSPORT COST TRANSPORT COSTS TRANSPORTATION TRANSPORTATION COSTS TRAVEL TIME TRIP TRUE VILLAGE ECONOMIES VILLAGE LEVEL VILLAGES WAGES
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111031155734 http://hdl.handle.net/10986/3633

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spelling	okr-10986-36332021-04-23T14:02:11Z Estimating the Long-term Impacts of Rural Roads : A Dynamic Panel Approach Khandker, Shahidur R. Koolwal, Gayatri B. AGRICULTURAL EMPLOYMENT AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AGRICULTURAL WAGE AGRICULTURE ASSET HOLDINGS ASSETS BENCHMARK BETTER ACCESS TO MARKETS BETTER ROAD BETTER ROADS BRIDGES CHRONIC ILLNESS COMMERCIAL BANKS COMMUNES COMMUNITIES COMMUNITY DEVELOPMENT COST PER TRIP CROP PRODUCTION CROP VARIETIES CULVERTS DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIMINISHING RETURNS DISTRIBUTIONAL EFFECTS DISTRIBUTIONAL OUTCOMES DISTRICTS DRAINAGE ECONOMETRICS ECONOMIC DEVELOPMENT ELASTICITY ENDOGENOUS VARIABLES FARM ACTIVITIES FARM ACTIVITY FARM EMPLOYMENT FARM INCOME FARM PRODUCTION FARM SECTOR FARM WORK FARM-GATE FEEDER ROADS FEMALE FOOD CONSUMPTION FOOD CONSUMPTION EXPENDITURE FOOD EXPENDITURE FOOD ITEMS HOSPITALS HOUSEHOLD CONSUMPTION HOUSEHOLD HEAD HOUSEHOLD SIZE HOUSEHOLD SURVEY HOUSEHOLD WELFARE HOUSEHOLDS IMPACT ON POVERTY INCOME INCOME GAINS INCOME GROUPS INCOME GROWTH INCREASING RETURNS INEQUALITY INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE REHABILITATION INTEREST RATE INTERVENTION INVESTMENT IN ROADS LAND ASSETS LANDHOLDINGS LENGTH OF ROAD LOCALITIES MOBILITY MOBILITY OF LABOR MODES OF TRANSPORT NONFARM INCOME POLITICAL INFLUENCE POOR POOR AREAS POOR HOUSEHOLDS POSITIVE EFFECTS POVERTY IMPACT POVERTY LINE POVERTY REDUCTION PRICE FLUCTUATIONS PRICE LEVELS PUBLIC ROAD RECONSTRUCTION REGRESSION ANALYSIS ROAD ROAD ACCESS ROAD CONSTRUCTION ROAD DEVELOPMENT ROAD IMPROVEMENT ROAD IMPROVEMENTS ROAD INVESTMENT ROAD NETWORK ROAD QUALITY RURAL RURAL COMMUNITY RURAL DEVELOPMENT RURAL HOUSEHOLDS RURAL INCOME RURAL INFRASTRUCTURE RURAL INFRASTRUCTURE DEVELOPMENT RURAL ROAD RURAL ROAD IMPROVEMENTS RURAL ROAD INVESTMENT RURAL ROAD INVESTMENTS RURAL ROAD REHABILITATION RURAL ROADS TARGETING TRANSPORT TRANSPORT COST TRANSPORT COSTS TRANSPORTATION TRANSPORTATION COSTS TRAVEL TIME TRIP TRUE VILLAGE ECONOMIES VILLAGE LEVEL VILLAGES WAGES Infrastructure investments are typically long-term. As a result, observed benefits to households and communities may vary considerably over time as short-term outcomes generate or are subsumed by longer-term impacts. This paper uses a new round of household survey as part of a local government engineering department's rural road improvement project financed by the World Bank in Bangladesh to compare the short-term and long-term effects of rural roads over eight years. A dynamic panel model, estimated by generalized method of moments, is applied to estimate the varying returns to public road investment accounting for time-varying unobserved characteristics. The results show that the substantial effects of roads on such outcomes as per capita expenditure, schooling, and prices as observed in the short run attenuate over time. But the declining returns are not common for all outcomes of interest or all households. Employment in the rural non-farm sector, for example, has risen more rapidly over time, indicating increasing returns to investment. The very poor have failed to sustain the short-term benefits of roads, and yet the gains accrued to the middle-income groups are strengthened over time because of changing sectors of employment, away from agriculture toward non-farm activity. The results also show that initial state dependence -- or initial community and household characteristics as well as road quality -- matters in estimating the trajectory of road impacts. 2012-03-19T18:05:56Z 2012-03-19T18:05:56Z 2011-10-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111031155734 http://hdl.handle.net/10986/3633 English Policy Research working paper ; no. WPS 5867 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	AGRICULTURAL EMPLOYMENT AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AGRICULTURAL WAGE AGRICULTURE ASSET HOLDINGS ASSETS BENCHMARK BETTER ACCESS TO MARKETS BETTER ROAD BETTER ROADS BRIDGES CHRONIC ILLNESS COMMERCIAL BANKS COMMUNES COMMUNITIES COMMUNITY DEVELOPMENT COST PER TRIP CROP PRODUCTION CROP VARIETIES CULVERTS DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIMINISHING RETURNS DISTRIBUTIONAL EFFECTS DISTRIBUTIONAL OUTCOMES DISTRICTS DRAINAGE ECONOMETRICS ECONOMIC DEVELOPMENT ELASTICITY ENDOGENOUS VARIABLES FARM ACTIVITIES FARM ACTIVITY FARM EMPLOYMENT FARM INCOME FARM PRODUCTION FARM SECTOR FARM WORK FARM-GATE FEEDER ROADS FEMALE FOOD CONSUMPTION FOOD CONSUMPTION EXPENDITURE FOOD EXPENDITURE FOOD ITEMS HOSPITALS HOUSEHOLD CONSUMPTION HOUSEHOLD HEAD HOUSEHOLD SIZE HOUSEHOLD SURVEY HOUSEHOLD WELFARE HOUSEHOLDS IMPACT ON POVERTY INCOME INCOME GAINS INCOME GROUPS INCOME GROWTH INCREASING RETURNS INEQUALITY INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE REHABILITATION INTEREST RATE INTERVENTION INVESTMENT IN ROADS LAND ASSETS LANDHOLDINGS LENGTH OF ROAD LOCALITIES MOBILITY MOBILITY OF LABOR MODES OF TRANSPORT NONFARM INCOME POLITICAL INFLUENCE POOR POOR AREAS POOR HOUSEHOLDS POSITIVE EFFECTS POVERTY IMPACT POVERTY LINE POVERTY REDUCTION PRICE FLUCTUATIONS PRICE LEVELS PUBLIC ROAD RECONSTRUCTION REGRESSION ANALYSIS ROAD ROAD ACCESS ROAD CONSTRUCTION ROAD DEVELOPMENT ROAD IMPROVEMENT ROAD IMPROVEMENTS ROAD INVESTMENT ROAD NETWORK ROAD QUALITY RURAL RURAL COMMUNITY RURAL DEVELOPMENT RURAL HOUSEHOLDS RURAL INCOME RURAL INFRASTRUCTURE RURAL INFRASTRUCTURE DEVELOPMENT RURAL ROAD RURAL ROAD IMPROVEMENTS RURAL ROAD INVESTMENT RURAL ROAD INVESTMENTS RURAL ROAD REHABILITATION RURAL ROADS TARGETING TRANSPORT TRANSPORT COST TRANSPORT COSTS TRANSPORTATION TRANSPORTATION COSTS TRAVEL TIME TRIP TRUE VILLAGE ECONOMIES VILLAGE LEVEL VILLAGES WAGES
spellingShingle	AGRICULTURAL EMPLOYMENT AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AGRICULTURAL WAGE AGRICULTURE ASSET HOLDINGS ASSETS BENCHMARK BETTER ACCESS TO MARKETS BETTER ROAD BETTER ROADS BRIDGES CHRONIC ILLNESS COMMERCIAL BANKS COMMUNES COMMUNITIES COMMUNITY DEVELOPMENT COST PER TRIP CROP PRODUCTION CROP VARIETIES CULVERTS DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIMINISHING RETURNS DISTRIBUTIONAL EFFECTS DISTRIBUTIONAL OUTCOMES DISTRICTS DRAINAGE ECONOMETRICS ECONOMIC DEVELOPMENT ELASTICITY ENDOGENOUS VARIABLES FARM ACTIVITIES FARM ACTIVITY FARM EMPLOYMENT FARM INCOME FARM PRODUCTION FARM SECTOR FARM WORK FARM-GATE FEEDER ROADS FEMALE FOOD CONSUMPTION FOOD CONSUMPTION EXPENDITURE FOOD EXPENDITURE FOOD ITEMS HOSPITALS HOUSEHOLD CONSUMPTION HOUSEHOLD HEAD HOUSEHOLD SIZE HOUSEHOLD SURVEY HOUSEHOLD WELFARE HOUSEHOLDS IMPACT ON POVERTY INCOME INCOME GAINS INCOME GROUPS INCOME GROWTH INCREASING RETURNS INEQUALITY INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE REHABILITATION INTEREST RATE INTERVENTION INVESTMENT IN ROADS LAND ASSETS LANDHOLDINGS LENGTH OF ROAD LOCALITIES MOBILITY MOBILITY OF LABOR MODES OF TRANSPORT NONFARM INCOME POLITICAL INFLUENCE POOR POOR AREAS POOR HOUSEHOLDS POSITIVE EFFECTS POVERTY IMPACT POVERTY LINE POVERTY REDUCTION PRICE FLUCTUATIONS PRICE LEVELS PUBLIC ROAD RECONSTRUCTION REGRESSION ANALYSIS ROAD ROAD ACCESS ROAD CONSTRUCTION ROAD DEVELOPMENT ROAD IMPROVEMENT ROAD IMPROVEMENTS ROAD INVESTMENT ROAD NETWORK ROAD QUALITY RURAL RURAL COMMUNITY RURAL DEVELOPMENT RURAL HOUSEHOLDS RURAL INCOME RURAL INFRASTRUCTURE RURAL INFRASTRUCTURE DEVELOPMENT RURAL ROAD RURAL ROAD IMPROVEMENTS RURAL ROAD INVESTMENT RURAL ROAD INVESTMENTS RURAL ROAD REHABILITATION RURAL ROADS TARGETING TRANSPORT TRANSPORT COST TRANSPORT COSTS TRANSPORTATION TRANSPORTATION COSTS TRAVEL TIME TRIP TRUE VILLAGE ECONOMIES VILLAGE LEVEL VILLAGES WAGES Khandker, Shahidur R. Koolwal, Gayatri B. Estimating the Long-term Impacts of Rural Roads : A Dynamic Panel Approach
geographic_facet	The World Region The World Region
relation	Policy Research working paper ; no. WPS 5867
description	Infrastructure investments are typically long-term. As a result, observed benefits to households and communities may vary considerably over time as short-term outcomes generate or are subsumed by longer-term impacts. This paper uses a new round of household survey as part of a local government engineering department's rural road improvement project financed by the World Bank in Bangladesh to compare the short-term and long-term effects of rural roads over eight years. A dynamic panel model, estimated by generalized method of moments, is applied to estimate the varying returns to public road investment accounting for time-varying unobserved characteristics. The results show that the substantial effects of roads on such outcomes as per capita expenditure, schooling, and prices as observed in the short run attenuate over time. But the declining returns are not common for all outcomes of interest or all households. Employment in the rural non-farm sector, for example, has risen more rapidly over time, indicating increasing returns to investment. The very poor have failed to sustain the short-term benefits of roads, and yet the gains accrued to the middle-income groups are strengthened over time because of changing sectors of employment, away from agriculture toward non-farm activity. The results also show that initial state dependence -- or initial community and household characteristics as well as road quality -- matters in estimating the trajectory of road impacts.
format	Publications & Research :: Policy Research Working Paper
author	Khandker, Shahidur R. Koolwal, Gayatri B.
author_facet	Khandker, Shahidur R. Koolwal, Gayatri B.
author_sort	Khandker, Shahidur R.
title	Estimating the Long-term Impacts of Rural Roads : A Dynamic Panel Approach
title_short	Estimating the Long-term Impacts of Rural Roads : A Dynamic Panel Approach
title_full	Estimating the Long-term Impacts of Rural Roads : A Dynamic Panel Approach
title_fullStr	Estimating the Long-term Impacts of Rural Roads : A Dynamic Panel Approach
title_full_unstemmed	Estimating the Long-term Impacts of Rural Roads : A Dynamic Panel Approach
title_sort	estimating the long-term impacts of rural roads : a dynamic panel approach
publishDate	2012
url	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111031155734 http://hdl.handle.net/10986/3633
_version_	1764387532433260544

Estimating the Long-term Impacts of Rural Roads : A Dynamic Panel Approach

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