Contribution of Rural Roads to Access to- and Participation in Markets: Theory and Results from Northern Ethiopia

Abstract

Road accessibility is considered to be one of the major factors influencing (or correlated to) rural households' access to and participation in markets. However, there are few studies that investigate this important topic. This paper, therefore, explores the issue from both theoretical and practical perspectives with household and village level data from Northern Ethiopia. It is generally assumed that road accessibility significantly contributes to both access to-and participation in markets by rural households. The results in this study, however, suggest that neither participation in major markets nor the amount of purchased agricultural inputs use are significantly different for households with respect to the degree of road accessibility in the study area. Nevertheless, the situation seems somewhat better in locations with good access to roads. On the other hand, the results in this study confirm that road accessibility significantly contributes to reducing farm gate prices of manufactured goods and increasing farm gate prices of agricultural goods.