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Rural Roads and Intermediated Trade: Regression Discontinuity Evidence from Sierra Leone

50 Pages Posted: 15 Oct 2012 Last revised: 14 Aug 2013

Lorenzo Casaburi

Stanford Institute for Economic Policy Research

Rachel Glennerster

Massachusetts Institute of Technology - Department of Economics

Tavneet Suri

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: August 13, 2013

Abstract

Using a road-level regression discontinuity design in Sierra Leone, we study the impacts of improvements in rural road infrastructure on crop prices in rural markets. We show that the improved roads reduced market prices of local crops. These price effects are stronger in markets that are further from major urban centers and in less productive areas. In addition, these price effects are reversed in areas with better cell phone penetration. We show that our empirical findings are consistent with a search cost framework a la Mortensen, but inconsistent with other models, such as Bertrand competition, bilateral bargaining, Cournot oligopsony.

Keywords: Rural Roads, Intermediated Trade, Sub-Saharan Africa

JEL Classification: O13, F15

Suggested Citation

Casaburi, Lorenzo and Glennerster, Rachel and Suri, Tavneet, Rural Roads and Intermediated Trade: Regression Discontinuity Evidence from Sierra Leone (August 13, 2013). Available at SSRN: https://ssrn.com/abstract=2161643 or http://dx.doi.org/10.2139/ssrn.2161643

Lorenzo Casaburi (Contact Author)

Stanford Institute for Economic Policy Research ( email )

579 Serra Mall at Galvez St.
Stanford, CA 94305-6015
United States

Rachel Glennerster

Massachusetts Institute of Technology - Department of Economics ( email )

E60-246
77 Massachusetts Avenue
Cambridge, MA 02139
United States

Tavneet Suri

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

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