Transportation Costs And Economic Development

This dissertation contributes to a growing literature using microeconomic data to explore questions in macroeconomic development, with particular focus on the importance of transportation costs. Specifically, I study the importance of idiosyncratic transportation costs and economic development via three different angles. In Chapter 1, I study how idiosyncratic transportation frictions as labor mobility barriers affect the sectoral sorting of workers between agriculture and non-agriculture and quantify their impact on aggregate and sectoral productivity, the pattern of occupational choices and selection. I add idiosyncratic transport costs by sector to an otherwise canonical two sector Roy model. I combine panel data on household level transport costs and income from Honduras with a structural model to quantitatively estimate the impact observed transport costs on the reallocation of labor and aggregate development through this selection channel. When removing transport costs, share of agricultural employment drops by 8 percent, agricultural productivity increases 1.32-fold and real GDP per worker rises 1.19-fold. In Chapter 2, I examine whether the geographic location of farmers, and their distance from markets can account for measured misallocation in the data. I quantitatively examine this question by leveraging a transport infrastructure development program in El Salvador. I use panel micro-level data on transport costs and agricultural production at the farm level along with a structural model in which farmers produce subject to transportation costs. The key insight of my model is that in the presence of transport costs the implied efficient allocation is different than that in the canonical model of misallocation. In Chapter 3, I explore the role idiosyncratic transportation costs from farm to market play in contributing to a pronounced subsistence agricultural sector. Particularly, I study how idiosyncratic transportation costs to market affect crop commercialization among farmers in Tanzania in the long rainy season. Methodologically, I combine panel data from the Tanzania National Panel Survey with a structural model to quantitatively examine the role transport costs play in facilitating the transformation from subsistence to commercial farming. I find that reductions in transport costs for food crop farmers, sees switching to cash crop farming.

Author dc:creator

• Hoseini, Nicole Stephanie

Advisor dc:contributor.advisor

• Adamopoulos, Tasso

Statement dc:rights

• Author owns copyright, except where explicitly noted. Please contact the author directly with licensing requests.

Language dc:language

en

Handle dc:identifier.uri

https://hdl.handle.net/10315/42707

OAI identifier oai:identifier

oai:yorkspace.library.yorku.ca:10315/42707