Main menu

Is Public Investment on Rural Road Transport Sector in Ethiopia Pro-poor? Evidence from the Ethiopian Rural Socio-Economic–Living Standard Measurement Survey Panel Data (LSMS)


Ethiopia has made relatively massive investments in the development of roads to tackle isolation. The overall disbursement over the past 15 years is about USD 12.2 billion. However, despite such investment, data show that Ethiopia’s rural road transport has still remained low. A number of studies have been done to deal with this important issue. Nevertheless, several gaps remain. Against this background, this study aims at investigating the impact and pro-poorness of public investment in rural road in rural Ethiopia. The study used data from the Ethiopian Living Standard Measurement Survey. Both descriptive statistics and econometric techniques are used to address the aforementioned objective. From the descriptive mean comparison test, it emerged that the mean value of real consumption per capita for households in villages with good access to all weather roads is ETB 173. Whereas, the mean value of real consumption per capita for households in villages with poor access to all weather roads is ETB 113.38 (p<0.00). The econometric analysis from the fixed effects model estimation reveal that improving the quality of rural roads and increasing access to all weather roads raise average real consumption per capita of households by as much as 10 per cent (p<0.00). The result from the propensity score matching reveled that households in villages with good access spend between 58 and 62 more than those with poor access. However, the result of the fixed effects quantile regression indicate that access to rural roads has a positive and significant effect on welfare only for the 8th and 9th percentiles. To this end, improving rural roads to a level of all weather roads standards and provision of transport should be a strategic priority. Inclusive growth approach is needed.

Corporate Author: 
Ethiopian Economics Association (EEA)
Ethiopian Economics Association (EEA)
Primary Descriptors: 

Investment; pro-poor growth

Secondary Descriptor: 

Fixed effect

Geographic Descriptors: 
Cataloge Date: 
Broad Subject heading: 
Transport - Road (Rural)
Call Number: 
330.963 PRO 2018
Serial Key Title: 
Proceedings of the Fifteenth International Conference on the Ethiopian Economy
Publication catagory: 
Content type: 
Publication date: 
2018-06-01 00:00:00
Conference Place: 
EEA Multi-purpose Building Conference Hall, Addis Ababa
Place of publication: 
Addis Ababa
Type of material: 
Current frequency: 
Thematic area: 
Microeconomics, Industry and Social Sector Related
Conference date: 
July 20 – 22, 2017