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Bridges

Author

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  • Wouter (W.) Zant

    (VU Amsterdam, The Netherlands; Tinbergen Institute, The Netherlands)

Abstract

We use spatial maize prices to estimate to what extent bridges in Mozambique lead to transport cost reductions and attribute these reductions to road distance and road quality. The applied methodology allows for potentially oligopolistic traders with spatially varying mark-ups. For identification we exploit the introduction of a road bridge over the Zambezi river, which creates variation in trading itineraries between markets. Estimations are based on monthly maize prices, in 24 markets, for five years before and after the introduction of the bridge. Estimates of the reduction of transport costs, averaged over itineraries, vary from 6% to 10%. Results are robust for non-random bridge placement and various other threats, and supported by observed transport cost data. Reduction in transport costs for particular itineraries varies more (up to 21%) and is roughly for two-third due to road distance and for one-third due to road quality.

Suggested Citation

  • Wouter (W.) Zant, 2017. "Bridges," Tinbergen Institute Discussion Papers 17-117/V, Tinbergen Institute, revised 06 Apr 2019.
    • Handle: RePEc:tin:wpaper:20170117
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    agricultural markets; transport costs; bridges; Mozambique; sub-Sahara Africa;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • 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
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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