Transportation costs, agricultural productivity, and cross-country income differences

  • Adamopoulos T
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Abstract

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. I study the role of transportation for development by introducing regional trade and a transportation sector into the standard two-sector model of agriculture-nonagriculture. Low transport productivity can distort the allocation of resources across geographically dispersed production units within sectors and between agriculture and nonagriculture. I infer cross-country transport productivity disparities from observed domestic transport costs and transport infrastruc ture stocks. "Endowing" rich countries with the transport productivity of poor countries would reduce their income by 10%. Combining transport productivity disparities with disparities in nonagricultural productivity and arable land the model yields a 50% higher rich-poor income ratio than the two-sector model.

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Authors

  • Tasso Adamopoulos

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