Port Rail Connectivity and Agricultural Production: Evidence from a Large Sample of Farmers in Ethiopia

29 Pages Posted: 13 Jun 2017

See all articles by Atsushi Iimi

Atsushi Iimi

International Monetary Fund (IMF); World Bank

Haileyesus Adamtei

World Bank

James Markland

World Bank

Eyasu Tsehaye

International Food Policy Research Institute (IFPRI) - Consultative Group on International Agricultural Research (CGIAR)

Date Written: June 6, 2017

Abstract

Agriculture remains an important economic sector in Africa, employing a large share of the labor force and earning foreign exchange. Among others, transport connectivity has long been a crucial constraint in Africa. In theory, railways have a particularly important role to play in shipping freight and passengers at low cost. However, most African railways were in virtual bankruptcy by the 1990s. Using a large sample of data comprised of more than 190,000 households over eight years in Ethiopia, the paper estimates the impacts of rail transport on agricultural production. Methodologically, the paper takes advantage of the historical event that a major rail line connecting the country to the regional hub, the Port of Djibouti, was abandoned in the 2000s. With spatially highly disaggregated fixed effects and instrumental variables incorporated, an agricultural production function is estimated. The elasticity with respect to port connectivity is estimated at 0.276. The use of fertilizer is also found to increase with transport cost reduction, supporting the fact that a large amount of fertilizer is imported to Ethiopia.

Keywords: Agricultural Economics

Suggested Citation

Iimi, Atsushi and Adamtei, Haileyesus and Markland, James and Tsehaye, Eyasu, Port Rail Connectivity and Agricultural Production: Evidence from a Large Sample of Farmers in Ethiopia (June 6, 2017). World Bank Policy Research Working Paper No. 8088. Available at SSRN: https://ssrn.com/abstract=2985514

Atsushi Iimi (Contact Author)

International Monetary Fund (IMF)

700 19th Street, N.W.
Washington, DC 20431
United States

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States

Haileyesus Adamtei

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

James Markland

World Bank

1818 H Street, NW
Washington, DC 20433
United States

Eyasu Tsehaye

International Food Policy Research Institute (IFPRI) - Consultative Group on International Agricultural Research (CGIAR) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

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