# **5.2 Long Difference and Instrumental Variable Results**

Table 2 shows long-difference OLS (columns 1–6) and instrumental variable (columns 7–12) results on areas incidentally connected to RSDP I–III.<sup>11</sup> Roads are associated with growth in nighttime lights and urban land, primarily in areas with medium-to-high levels of baseline nighttime lights. First-stage results of the MSTs are all highly significant. IV results show roughly similar coefficients compared to the OLS model and, similar to OLS results, show the largest gains from roads occurring in areas with high baseline nighttime lights. Focusing on the IV results, road upgrades are associated with a 17% increase in nighttime lights in Kebeles with high initial light and an 18% increase in Kebeles with medium initial nighttime lights. In addition, road upgrades are associated with a 27% increase in urban land in Kebeles with high initial light. Results using different versions of the MST instrument (least-distance MSTs and MSTs constructed using all targeted areas at once—not first within regions, then appended together) show similar results (see Appendix S8). In addition, results using two groups of baseline nighttime lights show gains concentrated in Woredas with positive nighttime lights.

**Table 2:** Long Difference, OLS and IV Results - RSDP I - III

||N|TL|Ur|ban|Cro|pland|NT|L|Ur|ban|Crop|land|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
||(1)|(2)|(3)|(4)|(5)|(6)|(7)|(8)|(9)|(10)|(11)|(12)|
|Imp Rd.|0_._03<sup>_∗∗_</sup>|0_._003|0_._01<sup>_∗_</sup>|_−_0_._001|0_._005|0_._01|0_._08<sup>_∗∗_</sup>|0_._04|0_._01|_−_0_._01|0_._04|0_._05|
||(0_._01)|(0_._01)|(0_._01)|(0_._005)|(0_._01)|(0_._01)|(0_._04)|(0_._03)|(0_._02)|(0_._02)|(0_._04)|(0_._04)|
|Imp Rd._×NTL_96 Low||0_._02||0_._02||_−_0_._01||0_._02||0_._02||_−_0_._06|
|||(0_._02)||(0_._01)||(0_._03)||(0_._03)||(0_._02)||(0_._06)|
|Imp Rd._×NTL_96 Med||0_._13<sup>_∗∗_</sup>||0_._02||0_._01||0_._18<sup>_∗∗_</sup>||0_._04||_−_0_._004|
|||(0_._06)||(0_._02)||(0_._02)||(0_._09)||(0_._03)||(0_._02)|
|Imp Rd._×NTL_96 High||0_._22<sup>_∗∗_</sup>||0_._20<sup>_∗∗_</sup>||_−_0_._04<sup>_∗_</sup>||0_._17<sup>_∗_</sup>||0_._27<sup>_∗∗_</sup>||_−_0_._05<sup>_∗_</sup>|
|||(0_._10)||(0_._08)||(0_._02)||(0_._09)||(0_._13)||(0_._03)|
|Constant|_−_0_._02|_−_0_._01|_−_0_._10<sup>_∗∗_</sup>|_−_0_._09<sup>_∗∗_</sup>|_−_0_._02|_−_0_._02|_−_0_._18|_−_0_._16|_−_0_._09|_−_0_._07|_−_0_._15|_−_0_._16|
||(0_._06)|(0_._06)|(0_._05)|(0_._04)|(0_._07)|(0_._07)|(0_._13)|(0_._13)|(0_._08)|(0_._07)|(0_._15)|(0_._15)|
|Type<br>|_OLS_|_OLS_|_OLS_|_OLS_<br>|_OLS_|_OLS_|_IV_|_IV_|_IV_|_IV_|_IV_|_IV_|
|1st Stage F-Stat|_N/A_|_N/A_|_N/A_|_N/A_|_N/A_|_N/A_|84_._5|25_._4|84_._5|25_._4|84_._5|25_._4|
|Observations<br>|10,220|10,220|10,220|10,220|10,220|10,220|10,220|10,220|10,220|10,220|10,220|10,220|
|Adjusted R<sup>2</sup>|0.003|0.02|0.001|0.02|-0.0001|-0.0001|-0.01|0.02|0.001|0.02|-0.003|-0.004|

Unit of analysis is Kebeles. Standard errors are clustered on Woredas. For models (6)–(12), the least-cost-distance MST is used, where the MST is first constructed for each region, then the regional MSTs are appended. The models include a control for the log distance to the nearest targeted area. “Imp Rd.” indicates that a Kebele was near (within 5km of) an improved road. _NTL_ 96 Low, Medium, and High are dummy variables for different groups of baseline nighttime lights; groups are formed using 3-quantiles of the maximum value of nighttime lights within Woredas that had some positive nighttime lights. The excluded group is Woredas where the maximum value of nighttime lights at baseline was 0. NTL is the average nighttime light within Kebeles, Urban is the total urban area within Kebeles, and Cropland is the total cropland area within Kebeles; we use the inverse hyperbolic sine transformation on all outcome variables, which has a similar interpretation as logs.<sup>_∗_</sup> p _<_ 0.1; _∗∗ ∗∗∗_ p _<_ 0.05; p _<_ 0 _._ 01

> 11The table shows IV results using the least-cost MST, where MSTs are constructed at the region level, then appended together. Appendix S8 shows results using alternate constructions of the MST.

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