Market Access, Trade Costs, and Technology Adoption: Evidence from Northern Tanzania
By Shilpa Aggarwal, Jon, Alan Spearot, Brian, Dahyeon
Review of Economics and Statistics | November 2022
Review of Economics and Statistics | November 2022
Citation
Aggarwal, Shilpa., Jon., Alan Spearot., Brian., Dahyeon. (2022). Market Access, Trade Costs, and Technology Adoption: Evidence from Northern Tanzania Review of Economics and Statistics .
Copyright
Review of Economics and Statistics, 2022
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Abstract
We collect data on prices, travel costs and farmer decisions to quantify market access and its impact on agricultural productivity in 1,183 villages in two regions of Tanzania. Villages at the bottom of the travel cost-adjusted price distribution face 40-55% less favorable prices than those at the top. One standard deviation of remoteness is associated with 20-25% lower input adoption and output sales. A spatial model of input adoption conservatively estimates that farmers behave as if travel costs are 5.7% ad-valorem per kilometer. Counterfactual estimates suggest that halving travel costs would double adoption and reduce the adoption-remoteness gradient by 15%.
Shilpa Aggarwal is an Associate Professor of Economics and Public Policy at the Indian School of Business (ISB). She is a development economist, whose research aims to explore market linkages in developing countries. For her PhD dissertation, she examined the effects of a road construction programme in India that connected remote rural areas to nearby markets. Her ongoing research is focused on agricultural supply chains in India and East Africa. She also works on issues pertaining to domestic trade, microfinance, and food policy.
Professor Aggarwal holds a PhD from the University of California, Santa Cruz, an MA from the Delhi School of Economics, and a BA from Shri Ram College of Commerce, University of Delhi.
Shilpa Aggarwal