Institutional Affiliation: University of California at Santa Cruz
NBER Working Papers and Publications
|November 2018||Market Access, Trade Costs, and Technology Adoption: Evidence from Northern Tanzania|
with Shilpa Aggarwal, Brian Giera, Jonathan Robinson, Alan Spearot: w25253
In this paper, we quantify market access in rural Tanzania, and the extent to which it constrains agricultural productivity. We collect granular data on farmer input and sales decisions, input and output prices, and travel costs in all 1,183 villages in two regions of Tanzania. We find that a village in the 90th percentile of the travel-cost adjusted price distribution faces input and output prices 40-55% less favorable than a village at the 10th percentile. In reduced form, an additional standard deviation of travel time is associated with 20-25% lower input adoption and output sales. We develop and quantify a spatial model of input adoption and conservatively estimate that farmers behave as if they face travel costs of 6% ad-valorem per kilometer of travel, which is equivalent to 40% whe...