UC Davis Agricultural and Resource Economics

Javier Parada, University of California, Davis

The impact of rural road rehabilitation in Nicaragua

Date and Location

Monday, November 21, 2016, 4:10 PM - 5:30 PM
ARE Library, 4101 Social Sciences and Humanities

Abstract

The rehabilitation of a rural road connecting an isolated coastal area to the city of León in western Nicaragua substantially improved the quality of the road’s surface. As a result, a significant reduction in transportation costs and travel times was expected to improve rural households’ access to modern urban markets. The degree to which the resulting impacts on market prices for locally-produced goods could effectively ameliorate poverty and income inequality in the coast as a consequence of the project will depend on the heterogeneous distribution of the road’s benefits. In the area of influence of the rehabilitated road, where fishing is the main source of income and poverty is either high or severe, it was found that improving the road could have benefited the poorest households by lowering the average cost of a basic basket of goods and by allowing fresh fish caught in the coast to be sold in urban markets.

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