The Impact of Agricultural Extension and Roads on Poverty and Consumption Growth in Fifteen Ethiopian Villages

Abstract

This paper investigates whether public investments that led to improvements in road quality and increased access to agricultural extension services led to faster consumption growth and lower rates of poverty in rural Ethiopia. Estimating an Instrumental Variables model using Generalized Methods of Moments and controlling for household fixed effects, we find evidence of positive impacts with meaningful magnitudes. Receiving at least one extension visit reduces headcount poverty by 9.8 percentage points and increases consumption growth by 7.1 percent. Access to all-weather roads reduces poverty by 6.9 percentage points and increases consumption growth by 16.3 percent. These results are robust to changes in model specification and estimation methods.

Keywords: poverty, Ethiopia, consumption growth, roads, extension

JEL Classification: O12