estimates, suggesting the latter are downwards-biased, possibly reflecting measurement error in our market access measure.

The positive relationship between market access and lights is also obtained when we estimate a difference-in-differences specification in which we relate 4-year growth rates in lights to changes in market accessibility over the same period. It is furthermore robust to using alternative market access measures that hold the population fixed, such that variation in market access is purely driven by obstacle deployment, as well as to using market access measures that account for access to foreign markets. Results also remain when we use different distance decay parameters. Finally, our results are robust to using bottom-coded instead of top-coded lights data, which capture light emissions from economically more vibrant localities better.

Our paper builds on and contributes to different strands of literature. To start with, by focusing on annual (and comparatively moderate) variation in market access, it complements earlier studies on the returns to investing in transportation infrastructure that have exploited large network expansions often materializing over many years, if not decades. Donaldson and Hornbeck (2016), for example, estimate the effect of changes in market access brought about by a major expansion of US railroads on the value of agricultural land. Faber (2014) and Allen and Atkin (2017) estimate the gains from trade that are made possible by unprecedented expansions of the highway network in respectively China and India.<sup>3</sup> Our study is particularly closely related to Storeygard (2016), which is the only other paper we are aware of that uses annual variation. He cleverly exploits variation in oil prices (interacted with distances between cities) to identify the impact of transportation costs on economic development in Africa, taking routes as given. We endogenize the choice of optimal routes by adopting a market access approach that builds on the seminal work of Donaldson and Hornbeck (2016). In a robustness analysis we consider access to both domestic and foreign markets (cf. Jedwab and Storeygard, 2017). More generally, our findings resonate with a sizeable body of literature that demonstrates that reducing trade frictions can enhance welfare (Arkolakis et al. (2012), Anderson and Van Wincoop (2004), Head and Mayer (2011)).

3Changes in transportation infrastructure have been shown to impact the structure of economic activity more broadly. Baum-Snow (2007), Duranton and Turner (2012), and Gonzalez-Navarro and Quintana-Domeque (2016) study the impact of transportation infrastructure on sub-urbanization, growth of cities, and property values respectively. Allen and Arkolakis (2014) assess how it shapes the spatial organization of the economy, while Adukia et al. (2017) and Asher and Novosad (2017) investigate the impact of rural road expansion on investments in education and the structural transformation of the labor market. Blankespoor et al. (2017) estimate the impact of road improvements on local employment and specialization. Jedwab and Moradi (2016) and Jedwab et al. (2017) examine how the collapse of railroad network impacted on road network investments as well as on the spatial distribution of economic activity.

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