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Market Access, Trade Costs, and Technology Adoption: Evidence from Northern Tanzania

Author

Listed:
  • Shilpa Aggarwal

    (Indian School of Business and J-PAL)

  • Brian Giera

    (Amazon Research)

  • Dahyeon Jeong

    (World Bank)

  • Jonathan Robinson

    (UCSC, BREAD, CEGA, J-PAL, and NBER)

  • Alan Spearot

    (UCSC)

Abstract

We collect data on prices, travel costs, and farmer decisions to quantify market access for chemical fertilizer and its impact on agricultural productivity in 1,180 villages in Northern Tanzania. Villages at the bottom of the travel cost-adjusted input price distribution face 40%–55% less favorable prices than those at the top. A standard deviation increase in village-level remoteness is associated with 20%–25% lower input adoption. A spatial model of input adoption conservatively estimates that total trade costs are 4 times pecuniary travel costs. Counterfactuals suggest that halving travel costs would more than double adoption and reduce the adoption-remoteness gradient by 63%.

Suggested Citation

  • Shilpa Aggarwal & Brian Giera & Dahyeon Jeong & Jonathan Robinson & Alan Spearot, 2024. "Market Access, Trade Costs, and Technology Adoption: Evidence from Northern Tanzania," The Review of Economics and Statistics, MIT Press, vol. 106(6), pages 1511-1528, November.
    • Handle: RePEc:tpr:restat:v:106:y:2024:i:6:p:1511-1528
    DOI: 10.1162/rest_a_01263
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    2. Aragón, Fernando M. & Restuccia, Diego & Rud, Juan Pablo, 2022. "Are small farms really more productive than large farms?," Food Policy, Elsevier, vol. 106(C).
    3. Alain de Janvry & Elisabeth Sadoulet, 2019. "Transforming developing country agriculture: Removing adoption constraints and promoting inclusive value chain development," Working Papers hal-02287668, HAL.
    4. Kopper, Sarah A. & Jayne, Thomas S., 2019. "Market access, agro-ecological conditions, and Boserupian agricultural intensification patterns in Kenya: Implications for agricultural programs and research," World Development, Elsevier, vol. 124(C), pages 1-1.
    5. de Janvry, Alain & Sadoulet, Elisabeth, 2020. "Using agriculture for development: Supply- and demand-side approaches," World Development, Elsevier, vol. 133(C).
    6. Emerick, Kyle & De Janvry, Alain & Sadoulet, Elisabeth & Dar, Manzoor & Wiseman, Eleanor, 2020. "Private Input Suppliers as Information Agents for Technology Adoption in Agriculture," CEPR Discussion Papers 15584, C.E.P.R. Discussion Papers.
    7. Xinyu Hou & Puyang Sun, 2023. "The impact of dismantling state monopoly on market integration: Evidence from the edible salt reform in China," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(3), pages 589-609, July.
    8. Despina Gavresi & Anastasia Litina & Georgios Tsiachtsiras, 2022. "“Railways and Roadways to Trust”," AQR Working Papers 202208, University of Barcelona, Regional Quantitative Analysis Group, revised Oct 2022.
    9. Janssens, Charlotte & Havlik, Petr & Boere, Esther & Palazzo, Amanda & Mosnier, Aline & Maertens, Miet, 2021. "The African Continental Free Trade Area: Trading Africa into Sustainability?," 2021 Conference, August 17-31, 2021, Virtual 315895, International Association of Agricultural Economists.
    10. Huw Lloyd-Ellis & Ardyn Nordstrom, 2021. "Trade, poverty and food security: A survey of recent research and its implications for East Africa," Working Paper 1460, Economics Department, Queen's University.
    11. Aggarwal, Shilpa & Francis, Eilin & Robinson, Jonathan, 2018. "Grain today, gain tomorrow: Evidence from a storage experiment with savings clubs in Kenya," Journal of Development Economics, Elsevier, vol. 134(C), pages 1-15.
    12. Aggarwal, Shilpa, 2021. "The long road to health: Healthcare utilization impacts of a road pavement policy in rural India," Journal of Development Economics, Elsevier, vol. 151(C).
    13. Astorga-Rojas, Diego, 2024. "Access to Markets and Technology Adoption in the Agricultural Sector: Evidence from Brazil," EconStor Preprints 289868, ZBW - Leibniz Information Centre for Economics.
    14. Kopper, Sarah A. & Jayne, Thomas S. & Snapp, Sieglinde S., 2020. "Sifting through the weeds: Understanding heterogeneity in fertilizer and labor response in Central Malawi," Ecological Economics, Elsevier, vol. 169(C).
    15. Aggarwal, Shilpa, 2018. "Do rural roads create pathways out of poverty? Evidence from India," Journal of Development Economics, Elsevier, vol. 133(C), pages 375-395.
    16. Wouter Zant, 2022. "Two Birds with One Stone: Technology Adoption and Market Participation through Protection against Crop Failure," Tinbergen Institute Discussion Papers 22-091/V, Tinbergen Institute.

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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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