|Number of students going to|1,097 1.03|(1.37)|0|11|422|0.89|(1.24)|0|6|
|---|---|---|---|---|---|---|---|---|---|
|elementary school||||||||||
|Number of students going to secondary|1,097 0.12|(0.43)|0|4|422|0.13|(0.46)|0|4|
|school||||||||||
|Number of students going to university|1,097 0.01|(0.13)|0|2|422|0.03|(0.20)|0|3|
|HH with difficulty going to hospital|1,097 0.012|(0.108)|0|1|422|0.009|(0.097)|0|1|
|because of road conditions||||||||||
|Number of HH members sick in the last<br>2 months|1,097 0.44|(1.18)|0|24|422|0.40|(1.24)|0|22|
|**Economic benefits**||||||||||
|Number of HH members working in<br>agriculture full time|1,097 1.131|(0.92)|0|6|422|0.874|(0.84)|0|4|
|Number of HH members working in|1,097 0.002|(0.04)|0|1|422|0.000|(0.00)|0|0|
|industry full time||||||||||
|Number of HH members working in<br>commerce full time|1,097 0.017|(0.16)|0|3|422|0.014|(0.12)|0|1|
|Number of HH members working in<br>services full time|1,097 0.007|(0.09)|0|1|422|0.009|(0.10)|0|1|
|Number of HH members working in<br>public sector full time|1,097 0.137|(0.38)|0|2|422|0.180|(0.45)|0|3|
|Household wage in the last month<br>(BRL)|888 384.1|(400.7)|0|5,300|329|520.7|(600.8)|0|6,000|

# 5 Methodology

## **_5.1 Self-selection and comparability between treatment and control groups_**

As previously mentioned, the fundamental challenge when impact evaluations in the road sector are conducted is that the localization of the road/prioritized work is not randomly assigned and is likely to cause bias in the evaluation (van de Walle 2009; Rand 2011). In general, the prioritization of works—whether they involve construction, rehabilitation or upgrading—depends on public policies based on the socioeconomic environment particular to each project area. For example, rural roads may be relatively abundant in productive agricultural areas (Jacoby 2000). Transport policy makers may also wish to develop or favor particular areas of the state in view of land-use planning and management.

In the case of the Tocantins Sustainable Regional Development Project, this self-selection problem is further compounded by the mechanism through which road sections are selected for improvement, that is, through a participatory approach that involves public consultations with local residents of each municipality. As a result, the process of selecting priority roads may be based on different perspectives and strategies, depending on the municipality (e.g., some municipalities may have given priority to social perspectives, focusing on the poorest, while others may have prioritized economic aspects, such as agricultural production).

Our definition of the control groups, defined as the communities that were given priority but in which actual work had not been executed or had been postponed at the time of the survey, makes it possible to attenuate this bias. In reality, the communities in the treatment and control groups differ both explicitly and implicitly from one another, no matter how these groups are defined. Although they are equally poor and, by and large, share similar demographics and social characteristics according to the survey data (Tables 5 and 6),<sup>17</sup> some differences between the two regions of the first analysis—

> 17 According to the FIRJAN Index of Municipal Development ( _Índice FIRJAN de Desenvolvimento Municipal,_ IFDM), there was no significant difference in the 2005 data between the two groups. IFDM is a municipal-level human development index prepared by the FIRJAN System (Rio de Janeiro State Federation of Industries _<mark>[Federação das Indústrias do Estado do Rio de Janeiro]</mark>_ <mark>)</mark> based on the following three areas: Employment/Income, Health, and Education.

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