The Effect of Road Accessibility on Households’ Wellbeing in Ethiopia

Abstract

The main objective of the study is to investigate the effect of road accessibility on households' well-being in rural Ethiopia. This study analyzed two-wave panel data set for two years (2011 and 2015) which was collected by CSA. Data analysis was carried out using descriptive statistics and econometric analysis including Propensity Score Matching (PSM) combined with Difference-in-Differences (DiD) method and finally robustness of DiD was checked using fixed effects of regression. The outcome variables were the commercialization index (commindex), total expenditure (tot_exp) and poverty indicator (poordummy). The DiD result revealed that the commercialization index and total expenditure were statistically significant at 1% for both variables. Moreover, the DiD for the poverty indicator at the end shows that there is statistical difference between 2011 and 2015 HHs at a 10% level of significance which means that road accessibility helped in the reduction of poverty. The results of the fixed effects model showed that, after controlling for the effects of time-invariant unobserved factors, road accessibility has a positive and significant impact on the commercialization index and total expenditure. By way of recommendation, the government and other stakeholders are advised to increase their investment in expanding road accessibility with proper monitoring and evaluation tools in order to avoid delays in projects and to effectively utilize scarce resources.