metadata: authors: 0: author: Iimi,Atsushi
1: author: Lancelot,Eric R.
2: author: Manelici,Isabela
3: author: Ogita,Satoshi
count: Brazil
docna: 0: docna: Social and economic impacts of rural road
            improvements in the state of Tocantins, Brazil
docty: Policy Research Working Paper
subtopic: Health Care Services Industry,Labor Markets,Educational Sciences,Rural Transport,Transport Services
teratopic: Education
abstracts: cdata!: The aim of this paper is to provide
            feedback on the question of socioeconomic benefits from
            rural road development and the impact of transport
            infrastructure on the poor, particularly the poorest and the
            bottom 20 percent of the population. This paper relies on
            impact evaluation methodologies, which are traditionally
            used in social sectors but less so in the transport sector.
            The study, including first surveys, was launched in 2003
            under the Tocantins Sustainable Regional Development
            Project. The paper highlights the context that led to the
            project’s design, which included an impact evaluation of the
            works envisaged under the project. The paper also highlights
            some of the main challenges faced by this impact evaluation
            and how these challenges were addressed for the present
            study. It then provides details about the data collected
            during the surveys and the key relevant characteristics of
            the population targeted by the surveys. It discusses the
            possible estimation methods envisioned to undertake the
            study and provides the main results of the assessment based
            on these methods. The analysis shows that improved rural
            roads changed people’s transport modal choice. People used
            more public buses and individual motorized vehicles after
            the rural road improvements. The paper also finds that the
            project increased school attendance, particularly for girls.
            Although the evidence is relatively weak in statistical
            terms, it indicates that the project contributed to
            increasing agricultural jobs and household income in certain regions.
geo_reg_key: 119228,517191
repnme: repnme: Social and economic impacts of rural road
            improvements in the state of Tocantins, Brazil
display_title: Social and economic impacts of rural
            road improvements in the state of Tocantins, Brazil
listing_relative_url: /research/2015/04/24416931/social-economic-impacts-rural-road-improvements-state-tocantins-brazil
topicv3: Transport m1326661 135,Education m1327048 470,Jobs m1503931 2670,Health m1504661 3480,Rural Accessibility m1504911 4178
publishtoextweb_dt: 2015-04-23T00:00:00Z
historic_topic: Education
origu: Off of Sr VP Dev Econ/Chief Econ (DECVP)
no_of_pages: 55
author_keys: 0: author_key: 914707
1: author_key: 862178
2: author_key: 1113158
3: author_key: 1165774
model_extractions: WPS7249 Policy Research Working Paper 7249 Social and Economic Impacts of Rural Road Improvements in the State of Tocantins, Brazil _Atsushi Iimi Eric R. Lancelot Isabela Manelici Satoshi Ogita_ Transport and ICT Global Practice Group April 2015
Policy Research Working Paper 7249

# **Abstract**

The aim of this paper is to provide feedback on the question of socioeconomic benefits from rural road development and the impact of transport infrastructure on the poor, particularly the poorest and the bottom 20 percent of the population. This paper relies on impact evaluation methodologies, which are traditionally used in social sectors but less so in the transport sector. The study, including first surveys, was launched in 2003 under the Tocantins Sustainable Regional Development Project. The paper highlights the context that led to the project’s design, which included an impact evaluation of the works envisaged under the project. The paper also highlights some of the main challenges faced by this impact evaluation and how these challenges were addressed for the present study. It then provides details about the data collected during the surveys and the key relevant characteristics of the population targeted by the surveys. It discusses the possible estimation methods envisioned to undertake the study and provides the main results of the assessment based on these methods. The analysis shows that improved rural roads changed people’s transport modal choice. People used more public buses and individual motorized vehicles after the rural road improvements. The paper also finds that the project increased school attendance, particularly for girls. Although the evidence is relatively weak in statistical terms, it indicates that the project contributed to increasing agricultural jobs and household income in certain regions.

This paper is a product of the Transport and ICT Global Practice Group. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The authors may be contacted at may be contacted at elancelot@worldbank.org, sogita@worldbank.org, and aiimi@worldbank.org.

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent._ Produced by the Research Support Team
# Social and Economic Impacts of Rural Road Improvements in the State of Tocantins, Brazil

Atsushi Iimi Eric R. Lancelot Isabela Manelici Satoshi Ogita The World Bank Group<sup>1</sup> JEL Classification: O120: Microeconomic Analyses of Economic Development I320: Measurement and Analysis of Poverty Q130 Agricultural Markets and Marketing; Cooperatives; Agribusiness J430 Agricultural Labor Markets Keywords: Impact Evaluation Results and Methods, Rural Roads Infrastructure and Transport, Access to Markets, Education and Jobs for Rural Communities and Farmers, Agriculture,

> 1 The authors thank Luis A. Andres, Lead Economist (GWADR), and Kirsten Hommann, Senior Economist (GSURR), as well as from the World Bank’s Brazil Country Office for their constructive feedback. The execution of this study would not have been possible without the kind financial support of a number of initiatives, including a DEC research grant, an LCR Sustainable Department (LCSSD) fund, and a Poverty and Social Impact Analysis (PSIA) grant.
# 1 Introduction

Rural accessibility remains a major challenge in developing countries. About 900 million rural dwellers worldwide lack access to all-season roads because they are located farther than two kilometers (km)—a 20- to 25-minute walk—from main roads (Roberts, Shyam and Rastogi 2006).<sup>2</sup> Time wasted in transit between home and school or hospital or market (which may in many cases even preclude travel) results in missed and reduced economic and social opportunities.

It is widely recognized that improved rural roads have a positive impact on rural inhabitants. Such improvements are expected to enhance their ability to access social services, markets and jobs, and therefore contribute to improving their living standards. Although the short-term impacts of such an undertaking are relatively clear—because transport costs and travel time can be reduced by improved road conditions (Jacoby 2000; Khandker, Bakht and Koolwal 2009; Khandker and Koolwal 2011)—longer-term impacts such as increased profitability of firms (Chandra and Thompson 2000) or increased employment in the agricultural and non-agricultural sectors (Lokshin and Yemtsov 2005) may take time to materialize (up to 10 or 15 years) and could depend on other conditions, such as the level of motorization (Escobal and Ponce 2002).

However, while ex ante and ex post economic evaluations of infrastructure projects have been used commonly for years to both justify and monitor the relevance of infrastructure investments based on recognized methodologies,<sup>3</sup> only a handful of rigorous studies have been conducted to measure the socioeconomic impact of rural road improvements on living standards.<sup>4</sup> This is partially due to the difficulties, inherent in transport projects, in undertaking impact evaluations: (a) the identification of an appropriate comparable control group is a challenge because the characteristics and surrounding conditions often differ from one group of beneficiaries to another, and investment decisions often rely on specific strategies that may introduce bias to perfectly randomized experiments; (b) beneficiaries may be geographically spread out over a large area, especially in cases of long-haulage transport projects, thus making it harder to define not only who the beneficiaries are but also the expected benefits; and (c) redistributed benefits to households may be diluted or mixed with other social and economic development factors, and may be over- or under-estimated, particularly in the short run.

With respect to road investments planned under the Tocantins Sustainable Regional Development Project (P060573), some of these constraints were levied; investments specifically targeted unpaved rural feeder roads and sought to benefit rural dwellers in the poorest regions of the state who lacked any alternative access to the main transport networks. Moreover, the selection process of roads to be improved was essentially left to rural dwellers, based on a participatory selection process involving all interested dwellers.

2 The Rural Access Index (RAI) is a key transport headline indicator that was developed as part of the Results Measurement Framework for IDA (the International Development Association) in 2005. In practice, the RAI measures the number of rural people living within two km (typically equivalent to a 20- to 25-minute walk) of an all-season road as a proportion of the total rural population. An “all-season road” is a road that is motorable year-round by the prevailing means of rural transport (typically a pickup or a truck that does not have four-wheel-drive). Occasional interruptions of short duration during inclement weather (e.g., heavy rainfall) are accepted, particularly on lightly trafficked roads.

3 For example, assessments of surplus to consumers and to producers, as well as tools such as Highway Development Management (HDN), a type of software initially developed by the Bank in the late 1970s and aimed at assessing the economic return of road investments.

4 For example, in Papua New Guinea, household consumption, which is used as a general welfare measurement, increased relative to the poverty line (Gibson and Rozelle 2003). Per capita expenditure was also found to increase due to rural road construction and upgrading in Bangladesh (Khandker, Bakht and Koolwal 2009). Poverty incidence declined and consumption increased in Ethiopia (Dercon, Gilligan, Hoddinott and Woldehanna 2008).

2
The main objectives of the present paper are twofold: (i) to describe the methodological challenges related to road-sector impact evaluation activities and lessons learned from the Tocantins experience; and (ii) to document the evidence that emerged in order to demonstrate the impacts of rural road improvements in the state, given the available survey data. The evaluation first focuses on direct outcomes to determine the existence of relatively short-term impacts resulting from the project. Thereafter, traditional social and economic impacts are measured. Two different methods are used—difference-in-differences (DID) matching and DID regression—to minimize issues observed in the control group through the execution of the surveys. In addition, instrumental variable (IV) estimators are also used to verify the robustness of the results.

The paper is organized as follows: Section II provides a context for the study. Section III discusses methodological challenges and lessons learned from the experience. Sections IV and V, respectively, present available data and describe the methodology used. Section VI summarizes the main findings. Section VII discusses various empirical issues and policy implications. Section VIII presents the study’s main conclusions.

# 2 Context of the study

Brazil has made impressive gains in terms of socioeconomic development in recent years. A steady gross domestic product (GDP) growth of one to six percent over the last decade, combined with sustained social policies, contributed to increasing the GDP per capita (constant 2005 US$) from US$4,400 in 2000 to US$5,700 in 2012.<sup>5</sup> This allowed more than 20 million people to rise above the poverty line in the past decade. However, these overall positive figures mask a wide range of realities on the ground. For instance, depending on the region, inequality remains persistently high in Brazil, with a Gini index of about 0.55 in 2009, even though it decreased from 0.66 in 2001. Many poor live in rural areas (rural dwellers total 27 million in Brazil) and lack access to services, markets and jobs, due to the lack of appropriate transport infrastructure and services.

The State of Tocantins is among the least-developed but fastest-growing regions in Brazil. Created under the 1988 Constitution, it is the country’s newest state. With a population of 1.38 million on 277,000 square kilometers (km2) of land, the population density is low at five persons per km2. Urbanization has accelerated at a fast pace since the state’s creation and is now aligned with the national trend in Brazil, where 79 percent of the population lives in urban areas. Tocantins’ urban population is concentrated in 10 major cities. Most of its other cities are small: over half of the state’s 139 municipalities contain fewer than 5,000 inhabitants, often scattered throughout the municipal jurisdiction’s territory.

Although the state’s GDP per capita has nearly doubled in the past six years, (a) it currently stands at a relatively low R$12,891 (2011)<sup>6</sup> (equivalent to US$7,400,<sup>7</sup> using the 2011 average exchange rate), placing Tocantins 16<sup>th</sup> among Brazil’s 27 states; (b) the Human Development Index (HDI) was 0.756 in 2005 (vs. 0.61 in 1991),<sup>8</sup> but about 11 percent (2008) of the population remains below the poverty line; (c) the infant mortality rate (2010) is 20.5 deaths per 1,000 children under the age of one (14.5 on average in Brazil); and (d) the literacy rate has improved significantly, from 62 percent in 1991 to 85 percent in 2007, but test scores remain well below Brazil’s average at both the primary and secondary levels, as does access to early childhood education. Finally, two vulnerable groups live in Tocantins, including (a) 13,100 indigenous peoples who reside mostly in six main indigenous

> 5 World Development Indicators.

> 6 IBGE: Brazilian Institute of Geography and Statistics ( _Instituto Brasileiro de Geografia e Estadística_ ).

> 7 Brazil’s GDP per capita in 2011 (current) was US$12,567 (World Development Indicators).

> 8 Defined by the Brazilian Federal Government as families with per capita income up to R$70 monthly.

3
territories (as per FUNAI,<sup>9</sup> IBGE 2010), and (b) about 7,500 residents of quilombos,<sup>10</sup> grouped in 15 dispersed rural communities.

Long-term development strategies aimed at promoting sustainable development and quality of life for citizens, under a state modernization approach, have been prioritized consistently under successive four-year, multi-annual plans ( _Planos Plurianuais,_ PPAs) adopted by different government administrations over the last 20 years. During the early stages of the state’s development, this translated into a strong focus on building core infrastructure, due to the state’s relative remoteness. While continuing to work on major infrastructure, in the early 2000s policy makers then focused on increasing accessibility to services, jobs and markets for the state’s remote poor populations.

In this context, the World Bank’s Board approved the Tocantins Sustainable Regional Development Project in December 2003. The project aimed to foster the improved effectiveness of road transport and the enhanced efficiency of selected public services. It included three components: (i) Participatory planning and management of regional and municipal development (US$6.5 million); (ii) Environmental management (US$10.2 million); and (iii) Rural road improvements (US$42.7 million). An impact evaluation was designed as a means to assess the impact of rural road improvements aimed at providing all-season accessibility to selected rural populations of the State of Tocantins.

The rural road improvement component targeted 67 municipalities within the four poorest regions in the eastern part of Tocantins: Northeast, Bico do Papagaio, Southeast and Jalapão (see Figure 1). Road improvements mostly comprised the construction of concrete bridges and culverts crossing rivers and streams, to allow year-round passage especially in rainy seasons. A participatory process, through forums open to the population of each municipality, was used to prioritize road interventions. Typically, 3 to 10 rural road sections were upgraded in each municipality, each representing 3 to 15 km of road length. At the outset, 63,000 rural dwellers<sup>11</sup> were expected to benefit from the road improvements. After having identified the roads, engineers identified the type of intervention needed at each location.

The civil works were implemented between 2006 and 2011. The timing of project implementation varied from one region to the next: most of the works were completed in the first region (Southeast) by 2010, and in the second region (Bico do Papagaio) by early 2011; works in the Northeast and Jalapão regions were completed, for the most part, only in late 2011. In total, close to 700 bridges and 2,100 culverts were built on about 4,400 km of unpaved municipal roads between 2006 and for all but six municipalities.<sup>12</sup>

# **Figure 1: Project regions in Tocantins, Brazil**

> 9 FUNAI: Brazil’s National Indian Foundation ( _Fundação Nacional do Índio)._

> 10 _Quilombolas_ are Afro-descendent groups whose ancestors fled slavery in remote regions. Of a total estimate of 3,000 _quilombola_ communities in Brazil, 171 have been officially recognized.

> 11 The total rural population in the project’s 67 municipalities is 162,000 (source: IBGE 2010). The project’s area of influence area has been 39% of the area of these 67 target municipalities (source: Implementation Completion Report, Tocantins Sustainable Regional Development Project, World Bank, 2012).

> 12 The works have been postponed in 6 municipalities: 3 in Bico do Papagaio, 1 in Northeast, and 2 in Jalapão.

4
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applied the difference-in-differences (DID) technique with score matching. With respect to Tocantins, however, before starting the surveys the State Government decided not to interview rural dwellers who would not benefit from the project (the control group), because it was feared that (a) they would be reluctant to answer the survey, and (b) it would trigger frustration and dissatisfaction, thus placing the government in a politically difficult situation.

Despite the absence of a control group _stricto sensu_ , the following analysis relies on some naïve definitions of this group. The first approach is a retrofit pipeline comparison thanks to the abovedetailed staggered execution of the works depending on the region. All road improvement works had been completed in the Southeast region by the time of the follow-up survey, while only 30 percent of the communities, or 228 households out of 540, had benefited from the completed works in the Bico do Papagaio region.<sup>13</sup> In the remaining communities, works were ongoing or had just been initiated. Using this time difference in project implementation, certain comparisons can be made between these two regions.

The second possibility relies on the fact that some road improvement works were postponed, although they had been planned. In Bico do Papagaio, works were postponed in seven communities belonging to three municipalities. In addition, in turned out that five other communities never benefited from the project because of the relocation of the planned works from the original sites. In the Northeast and Jalapão regions, all communities saw the completion of project works before the follow-up survey was conducted, with the exception of 11 communities in which projects were postponed.

For the purposes of this study, these communities with uncompleted or postponed works were defined as a control group because: (a) these changes were mainly due to the community’s difficulty in paying counterpart funds for the works, which was somewhat linked to the socioeconomic or geographical characteristics of households/municipalities, resulting in little endogeneity when the control group was chosen; and (b) all communities surveyed in the evaluation—including control and treatment groups—were selected through public consultations in order to be treated at the beginning of the project and therefore to mitigate risks of incomparability between the two groups.

Although the manner in which the control group is defined may be practical, it may still be potentially controversial. In particular, it leaves reservations about the comparability of the two groups. As discussed below, the Southeast and Bico do Papagaio regions are different in certain aspects. From a statistical point of view, unbalanced sample sizes may also be a matter of concern. In the case of the Northeast and Jalapão, the control group is much smaller than the treatment group. The difference in means between the two groups is still an unbiased estimator of the project’s impact, but the standard errors tend to be larger.

A useful and practical remedy, although not perfect, is score matching. As discussed in the literature (e.g., Mu and van de Walle 2011), score matching can ensure comparability between two groups in a quasi-experimental evaluation. Our data suggest that the two groups in question are comparable at least in a statistical sense, excepting several outliers.

Impact evaluation in the transport sector is also challenging due to the complexity of results chains. The theory of change is critical when the possible causal chain that links inputs, outputs, outcomes and impacts is considered. However, a transport project can generate multisectoral and multidimensional benefits. In addition, there may be other interventions that could affect outcomes and impacts of interest. Notably, project life is long in the transport sector. Thus, the causality between interventions and results might become complicated over time, and measured impacts might be either over- or underestimated.

With regard to the Tocantins road project, a wide range of outcomes and impacts will be measured based on the following results chain (Figure 2). First, bridges and culverts will be rehabilitated, and

> 13 The completion of the project works was confirmed by households that were surveyed.

6
are project outputs. When the works are completed, local residents are likely to feel some benefits from the project, although these may not be quantifiable. Subjective assessment can include, for example, whether personal travel became easier than before, and whether the living conditions, in terms of roads, improved in the last 12 months.

As people actually pass through the areas with the rehabilitated bridges and culverts, subjective as well as objective outcomes are likely to emerge over time. The bridge and culvert works might well change physical accessibility in rural areas, especially during the rainy season. Accessibility to certain locations should be improved, particularly in terms of travel time. Thereafter, improved accessibility will likely affect transport demand. People might travel more frequently, and available transport modes and services can also be expected to change as a consequence.

In the long run, an even wider range of economic and social benefits may be measured. In theory, improved accessibility may increase school attendance. Health conditions are also expected to improve thanks to enhanced road accessibility. Similarly, such changes might stimulate new local businesses (e.g., Lokshin and Yemtsov 2005; Mu and van de Walle 2011) and encourage farmers to sell their agricultural products in the market, eventually resulting in job creation and household income growth.

Due to the limited timeframe of the evaluation in Tocantins (see Figure 2 below), it is unlikely that all of the above outcomes and impacts could be captured in the surveys. It is also less likely that the individual impacts will be clearly separated; some may be overlapped and intermixed, possibly complicating the interpretation of results. Nonetheless, the following analysis will detail various ways in which the populations concerned are benefiting from the project works.

Finally, it is also noteworthy that impacts are not always measured. Whether or not they are captured depends largely on the questionnaire design, which always presents a challenge. The surveys must include well-conceived questions capable of capturing the intended impacts. People may feel benefits only under particular circumstances. For instance, they may not perceive benefits from improved accessibility during the dry season, because they experienced few difficulties even before the project’s launch. Furthermore, many members of these communities may not travel frequently; as such, it may be difficult to measure increased demand for transport by asking how many times a respondent traveled in the last two weeks.

**Figure 2: Expected transport, social and economic impacts of rural road interventions**

<!-- Start of picture text --> Project completion and perceptions<br>Rural accessibility<br>(travel time, distance to nearest market, schools, hospitals)<br>Demand for mobility Modal change<br>(frequency of travel) (use of public buses, private cars)<br>Health benefits Educational benefits Economic benefits<br>(sick HH members) (school attendance) (employment)<br>Development impact<br>(household income)<br>Short-term<br> Long-term<br><!-- End of picture text --> 7
# 4 Data

## 4.1 Sampling and Surveys

To understand the project’s development impacts, the State Government and the World Bank designed a comprehensive impact evaluation survey in 2004, with the aim of quantifying the project’s social and economic benefits and identifying the underlying causal chains between the project and potential outcomes. The surveys were administered at different times, due to the variation in project execution schedules. The analysis has thus been divided to reflect these differences and to exclude different time-fixed effects, pairing the Southeast and Bico do Papagaio regions, and the Northeast and Jalapão regions.

<u>Surveys in the Southeast and Bico do Papagaio. For the first group, baseline data were collected</u> between September and December 2005 from a total of 1,069 households in 110 communities (Table 1).<sup>14</sup> Works were completed in the Southeast by 2010 and in Bico do Papagaio by early 2011. The follow-up survey was conducted between June and July 2011 and covered 1,001 households in the same municipalities.<sup>15</sup> The sample size was determined based on the preliminary survey of population distribution in the project areas. The sample size was similar for both regions: 529 households were surveyed in 41 communities of the Southeast region, and 540 households in 69 communities were covered in the Bico do Papagaio region. The total sample size was determined based on the standard power calculations, which indicate that a sample of 1,500 households would be sufficient. The baseline survey is supportive of this. For instance, the average travel time was 84 minutes, with a standard deviation of 87.1. Under standard assumptions (power=0.8; Type I error=0.05), it should be enough to detect a more than five percent improvement in travel time. The sample size of each region was decided based on population data. The subsample size of each community was then determined in proportion to the number of households that it contained.

<u>Surveys in the Northeast and Jalapão. For the second group, the baseline data were collected between</u> May and November 2008. The sample was relatively smaller than in the first group because the density of population is lower in these regions. In total, 422 households in 110 communities were interviewed (Table 2): 170 households in 27 communities of the Jalapão region and 252 households in 46 communities of the Northeast region. Works in the Northeast and Jalapão were completed, for the most part, in late 2011. Accordingly, the follow-up survey, conducted from October to December 2012, covered 319 households: 290 in the Northeast and 29 in Jalapão.

**Table 1: Sample size for Bico do Papagaio and Southeast Regions (Group 1)**

|Region|Treatment<br>t=0<br>t=1|Cont<br>t=0|rol<br>t=1|R|ural Popul<br>2000|ation<br>2010|
|---|---|---|---|---|---|---|
|Southeast|529|471|||43,508|34,029|
|Bico doPapagaio|109|117|431|413|62,768|67,000|
|Total|638|588|431|413|||

**Table 2: Sample size for Jalapão and Northeast Regions (Group 2)**

||Treatment|Control||Rural Population|
|---|---|---|---|---|
|Region|t=0<br>t=2|t=0|t=2|2000<br>2010|

14 The term “community” does not cover an administrative or jurisdictional reality. For the purpose of the survey, the term “community” covered the cluster of residents along a road segment where the works were executed. It often corresponds to the boundaries of local business associations, if any.

15 The follow-up survey does not cover 11 relatively small municipalities that were included in the baseline survey.

8
|Jalapão|140|103|30|0|13,034|11,527|
|---|---|---|---|---|---|---|
|Northeast|224|187|28|29|42,815|39,898|
|Total|364|290|58|29|||

The baseline and follow-up surveys were conducted in different months of the dry season. However, this would not affect measuring the envisaged impact during the rainy season because: (a) most items in the questionnaire asked about the general conditions of households or infrastructure, which were little affected by month or seasonality; (b) it is expected that accessibility during Tocantins’ long rainy season (almost six months) will affect basic welfare over the entire year, including the dry season; and (c) it is impractical to conduct interview surveys during the rainy season due to access difficulty, especially in the case of the baseline survey before the works.

# **_4.2 Basic Characteristics of the Population_**

The baseline survey provided an overview of household characteristics in the State of Tocantins (Table 3). The average household size is roughly four, and household heads are mostly male. The adult literacy rate is approximately 70 to 80 percent across the regions. A household has, on average, 1 to 1.5 school children. The survey data indicated that some children could not attend school due to illness, but few children were prevented from attending because of transport difficulties.

Every two or three households had at least one person who had been ill in the previous two months. Doctors and nurses appear to be available: they are present five to six days per week at the nearest health centers. Transport does not pose a major constraint for those seeking to reach a health center or hospital. Meanwhile, the infrastructure access of households varies across regions. The Southeast in particular appears to lag behind other regions.

The average household income ranges from R$370 in the Southeast to R$540 in the Northeast. Notably, there is significant variation within each region, ranging from nearly R$0 to R$6,000.

The economic structure does not differ significantly across regions. Although agriculture is the main sector, land distribution is highly skewed. Most households own fewer than 5 ha of land; 90 percent of households own fewer than 20 ha; and only 1 percent of the total number of households uses more than 100 ha of land for agricultural production. About 20 percent of households are engaged in some form of cottage industry, of which half are selling a portion of these products in the market.

People appear to be lightly indebted. About 50 to 60 percent of households borrow money. The average debt varies from household to household but represents between two and six months of household income.

**Table 3: Basic household characteristics by region (baseline survey)**

||Bico do<br>Papagaio So|utheast No|rtheast|Jalapão|
|---|---|---|---|---|
|**Demographics**|||||
|HH size|4.25|3.98|3.78|<br>3.96|
|HH head = male|0.90|0.81|0.89|<br>0.87|
|Adult literacy|0.77|0.73|0.80|<br>0.74|
|HH head education >|0.09|0.07|0.07|<br>0.14|
|secondary|||||
|**Schooling**|||||
|No. of school children|1.43|1.14|1.06|<br>0.98|
|No. of school boys|0.72|0.64|0.61|<br>0.46|
|No. of school girls|0.70|0.50|0.46|<br>0.52|

9
|No. of children not<br>|0.04|0.04|0.01|0.03|
|---|---|---|---|---|
|attending school because<br>of disease|||||
|No. of children not|0.00|0.01|0.00|0.01|
|attending school because<br>of transport difficulties|||||
|**Health**<br>|||||
|No. of sick HH members<br>|0.43<br>|0.45|0.47|0.31<br>|
|No. of days that doctor is|5.02|4.32|4.91|3.55|
|available per week|||||
|No. of days that nurse is|5.97|5.91|5.84|5.42|
|available per week|||||
|HH not going to hospital|0.01|0.02|0.01|0.01|
|because of transport<br>difficulties|||||
|**Infrastructure access**|||||
|HH using wood for cooking|0.35|0.88|0.76|0.76|
|HH using coal for cooking|0.43|0.00|0.02|0.00|
|HH using gas for cooking|0.22|0.11|0.21|0.21|
|HH using power for cooking|0.00|0.00|0.00|0.00|
|HH using power for lighting|0.71|0.39|0.66|0.61|
|HH using generator for|0.01|0.06|0.01|0.01|
|lighting|||||
|HH using tap water for|0.42|0.34|0.51|0.59|
|cooking|||||
|**Income and jobs**|||||
|Monthly HH income (R$)|400.3|367.0|543.5|481.0|
|No. of HH members engaged|1.199|1.062|0.968|0.735|
|<br>in agriculture|||||
|<br>No. of HH members engaged|0.002|0.002|0.000|0.000|
|in industry|||||
|No. of HH members engaged|0.024|0.011|0.016|0.012|
|in commerce|||||
|No. of HH members engaged|0.004|0.011|0.012|0.006|
|in service|||||
|No. of HH members engaged|0.112|0.161|0.167|0.200|
|in public sector|||||
|**Agriculture**|||||
|Land for rice (ha)|2.88|3.72|2.73|1.61|
|<br>Land for beans (ha)|0.72|0.37|0.52|0.66|
|<br>Land for soy (ha)|0.01|0.01|0.00|0.04|
|Land for corn (ha)|2.48|4.10|1.52|1.63|
|Land for cassava (ha)|0.95|0.78|8.83|0.95|
|Land for fruit (ha)|7.03|2.96|1.61|0.52|
|Land for cane (ha)|0.31|0.77|0.08|0.45|
|Land for pasture (ha)|1.60|1.09|2.18|0.84|
|**Cottage industry:**|||||
|<br>HH engaged in cottage|0.18|0.25|0.25|0.22|
|<br>industry|||||
|<br>HH engaged in cottage|0.10|0.11|0.13|0.09|
|industry for sales|||||
|**Credit access:**|||||
|HH borrowing money|0.62|0.65|0.49|0.51|
|Amount of debt(R$)|1987.1|1342.2|3147.8|992.4|

10
# **_4.3 Selected variables_**

First, to assess local residents’ perception of and satisfaction with the project, the survey asks how each household benefited in the following domains: access to health, access to schools, access to work, and ease of personal travel.

To measure improved physical accessibility, two measurements are considered: distance to a certain destination, and travel time required to reach it. Although the former may measure a more direct outcome of the project, the latter may be affected by other factors, such as available modes of transportation. Trips with the following four destinations are examined: populated area, municipal center, health center, and elementary school.

In theory, improved accessibility is expected to increase <u>demand for transport. To measure such</u> effects, the frequency of trips with the following five basic purposes is examined: purchasing food, purchasing other goods, going to work, doing business, and visiting friends and relatives. Improved accessibility is also expected to change people’s transport behavior. Although the provision of public bus service normally depends on a policy or regulatory decision, the regularity of public transport services may be improved thanks to improved road accessibility. As a result, the number of people using public buses may increase. The individual motorcycle and vehicle ownership rate may increase directly due to better road conditions and indirectly due to income increases resulting from improved transport accessibility. This, in turn, may result in increased numbers of people using cars to reach particular places.

To capture longer-term economic and social benefits, the following impacts are considered: Improved accessibility may increase school attendance, although such an impact may be difficult to observe in the present case, given the low level of school non-attendance due to difficult transport conditions even before the project’s launch (as mentioned above and shown in Table 3). <u>Health conditions are also expected to improve in the long run. Although it is recognized that survey</u> respondents did not generally consider transport to be a critical constraint when they visit hospitals, according to the baseline survey (Table 3) the level of difficulty in reaching a hospital due to road conditions is factored in, along with the number of sick household members. The reduction in travel time may <u>increase competitiveness because people may use saved time for more productive</u> activities. Improved rural accessibility may also allow farmers to sell their agricultural products more easily in the market, and may result in <u>job creation</u> in the agricultural sector. Moreover, new businesses, such as retailers and agro-businesses, may also be fostered.

Finally, household income was examined in order to evaluate the intervention’s overall development <u>impact.</u><sup>16</sup> All of the direct and indirect benefits mentioned above are expected to contribute to improving these rural populations’ welfare, which is theoretically measured by household consumption. Although household consumption is generally difficult to gauge, household income was used as a proxy for welfare improvement. The summary statistics of all these variables are presented in Table 4 below.

**Table 4: Summary statistics of outcome variables (baseline data)**

|Bico do Papagaio &||
|---|---|
|<br>Southeast|Jalapão & Northeast|
|Obs. Mean Std. Dev. Min. Max.|Obs. Mean Std. Dev. Min. Max.|

**Perceptions of benefits** (measured as the proportion of households perceiving benefits out of

> 16 The household income variable in the follow-up survey is adjusted to the 2005 price, using consumer price indices of

> 1.340 and 1.412 in 2011 and 2012, respectively. In the data obtained, there is no other variable in nominal terms.

11
|the total number of households<br>interviewed):|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
|<br>Improved access to health posts|1,093|0.29|(0.46)|0|1|393|0.33|(0.47)|0|1|
|Improved access to schools|1,093|0.28|(0.45)|0|1|393|0.31|(0.47)|0|1|
|<br>Improved access to work|<br>1,093|<br>0.26|<br>(0.44)|0|1|393|0.26|<br>(0.44)|0|1|
|<br>Easier personal travel|1,093|0.27|<br>(0.44)|0|1|393|0.29|<br>(0.45)|0|1|
|**Rural accessibility**|||||||||||
|Distance to nearest populated place<br>|1,097|14.2|(21.6)|0|120|422|22.9|(23.1)|0|100|
|(km)|||||||||||
|Distance to municipal center (km)|1,097|29.3|(22.8)|0|120|422|44.6|(32.6)|0|500|
|Distance to nearest hospital (km)|1,097|26.6|(22.5)|0|120|422|38.6|(21.9)|0|100|
|Distance to nearest school (km)|1,097|<br>3.5|(7.3)|0|120|422|6.7|(17.9)|0|200|
|Distance to nearest populated place|818|67.3|(77.6)|2|480|319|77.7|(87.4)|1|840|
|(minutes)|||||||||||
|Distance to municipal center (minutes)|1,087|91.0|(142.4)|1|2,880|406|116.2|(189.0)|5|2,040|
|Distance to nearest hospital (minutes)|1,091|81.6|(85.8)|2|1,230|418|93.1|(96.5)|1|870|
|Distance to nearest school (minutes)|1,084|24.6|(72.8)|1|1,800|411|24.7|(31.7)|1|240|
|**Demand for mobility**|||||||||||
|Number of trips to buy food in the last<br>|1,097|0.34|(0.86)|0|20|422|0.16|(0.40)|0|3|
|7 days|||||||||||
|Number of trips to buy other goods in<br>the last 7 days|1,097|0.04|(0.27)|0|4|422|0.03|(0.16)|0|1|
|<br>Number of trips to go to work in the<br>|1,097|1.17|(3.06)|0|52|422|0.91|(1.85)|0|7|
|last 7 days|||||||||||
|<br>Number of trips to do business in the<br>last 7 days|1,097|0.15|(0.57)|0|7|422|0.31|(3.08)|0|62|
|Number of trips to visit friends or<br>relatives in the last 7 days<br>|1,097|0.13|(0.54)|0|7|422|0.09|(0.33)|0|3|
|**Modal shift**|||||||||||
|Dummy for bus use to go to nearest<br>populated place|1,097|0.09|(0.29)|0|1|422|0.02|(0.15)|0|1|
|<br>Dummy for bus use to go to municipal<br>center|1,097|0.20|(0.40)|0|1|422|0.08|(0.28)|0|1|
|Dummy for bus use to go to nearest<br>hospital|1,097|0.17|(0.38)|0|1|422|0.07|(0.26)|0|1|
|<br>Dummy for bus use to go to nearest<br>school|1,097|0.022|(0.15)|0|1|422|0.002|(0.05)|0|1|
|Dummy for car use to go to nearest<br>populated place|1,097|0.037|(0.19)|0|1|422|0.002|(0.05)|0|1|
|<br>Dummy for car use to go to municipal<br>center|1,097|0.06|(0.24)|0|1|422|0.01|(0.10)|0|1|
|Dummy for car use to go to nearest<br>hospital|1,097|0.07|(0.25)|0|1|422|0.01|(0.08)|0|1|
|<br>Dummy for car use to go to nearest|1,097|0.014|(0.12)|0|1|422|0.005|(0.07)|0|1|
|school|||||||||||
|Dummy for HH with bicycle|1,097|0.54|(0.50)|0|1|422|0.44|(0.50)|0|1|
|Dummy for HH with motorcycle|1,097|0.17|(0.37)|0|1|422|0.29|(0.45)|0|1|
|<br>Dummy for HH with car|1,097|0.08|<br>(0.28)|0|1|422|0.09|<br>(0.28)|0|1|
|**Social benefits**|||||||||||
|HH with children who cannot go to|1,097|0.005|(0.074)|0|1|422|0.002|(0.049)|0|1|
|<br>school because of road conditions|||||||||||
|Number of school children in HH|1,097|1.28|(1.54)|0|11|422|1.03|(1.46)|0|7|
|Number of school boys in HH|1,097|0.68|(1.01)|0|7|422|0.55|(0.92)|0|5|
|Number of school girls in HH|1,097|0.60|(0.94)|0|6|422|0.48|(0.83)|0|4|
|Number of students going to preschool|1,097|0.18|(0.50)|0|5|422|0.14|(0.41)|0|3|

12
|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.

13
Bico do Papagaio and the Southeast—remain significant in specific areas, such as infrastructure access. The control group, which is essentially composed of communities in the Bico do Papagaio region, has better access to basic infrastructure services, such as gas, electricity and water supply. As a result, the diffusion rates of certain home appliances also look different from one group to the other. For example, with better access to grid power, 54 percent of households in the control group own refrigerators, while the same is true of only 34 percent in the treatment group. About 68 percent of households in the control group were using electricity for lighting, but this figure reached only 22 percent in the treatment group.

# **Table 5: Summary statistics of explanatory variables (baseline): Bico do Papagaio and Southeast**

||Contro|l||||||
|---|---|---|---|---|---|---|---|
|Explanatory variable (baseline)|group||T|reatment gro|up<br>|Differe|nce|
||Obs.|Mean|Std.Dev.|Obs. Mean|Std.Dev.|Zele|nt stat.|
|Household size|441|4.17|<br>(0.09)|656 4.08|(0.08)|0.09|(0.12)|
|Adult share|438|0.63|<br>(0.01)|655 0.65|(0.01)|-0.02|(0.02)|
|HH head sex: Male|441|0.90|<br>(0.01)|656 0.83|(0.01)|0.07|(0.02) ***|
|HH head education: Elementary|441|0.66|<br>(0.02)|656 0.66|(0.02)|-0.01|(0.03)|
|HH head education: Secondary|441|0.07|<br>(0.01)|656 0.04|(0.01)|0.04<br>-|(0.01) ***|
|HH head education: University<br>Appliance ownership:|441|0.007|(0.004)|656 0.014|(0.005)|0.007|(0.006)|
|Refrigerator|441|0.54|<br>(0.02)|656 0.34|(0.02)|0.20|(0.03) ***|
|Appliance ownership: Color TV|441|0.52|<br>(0.02)|656 0.29|(0.02)|0.23|(0.03) ***|
|Appliance ownership: Radio|441|0.65|<br>(0.02)|656 0.61|(0.02)|0.04|(0.03)|
|Appliance ownership: Gas stove|441|0.82|<br>(0.02)|656 0.69|(0.02)|0.14|(0.03) ***|
|Appliance ownership: Washing||||||||
|machine|441|0.11|<br>(0.01)|656 0.10|(0.01)|0.01|(0.02)|
|Gas use for cooking|441|0.21|<br>(0.02)|656 0.13|(0.01)|0.08|(0.02) ***|
|Power use for lighting|441|0.68|<br>(0.02)|656 0.46|(0.02)|0.22|(0.03) ***|
|Tapwater forcooking|441|0.44|<br>(0.02)|656 0.34|(0.02)|0.09|(0.03)***|
|Note: Standard errors a<br>at 10%, 5% and 1%, re|re show<br>spectivel|n in par<br>y.|entheses.|*, **, *** indi|cate the s|tatistic|al significance|

**Table 6: Summary statistics of explanatory variables (baseline): Jalapão and Northeast**

|Explanatory variable (baseline)|Contro<br>group<br>Obs.|l<br>Mean|T<br>Std.Dev.|reatment gro<br>Obs. Mean|up<br> <br>Std.Dev.|Differe<br>Zele|nce<br>n t stat.|
|---|---|---|---|---|---|---|---|
|Household size|58|3.81|(0.27)|364 3.86|(0.11)|-0.05|(0.30)|
|Adult share|58|0.65|(0.04)|364 0.68|(0.01)|-0.03|(0.04)|
|HH head sex: Male|58|0.93|(0.03)|364 0.88|(0.02)|0.05|(0.05)|
|HH head education: Elementary|58|0.62|(0.06)|364 0.65|(0.03)|-0.02|(0.07)|
|HH head education: Secondary|58|0.000|(0.000)|364 0.058|(0.012)|-0.06<br>-|(0.03) *|
|HH head education: University<br>Appliance ownership:|58|0.017|(0.017)|364 0.041|(0.010)|0.024 (|0.027)|
|Refrigerator|58|0.45|(0.07)|364 0.55|(0.03)|-0.10|(0.07)|
|Appliance ownership: Color TV|58|0.21|(0.05)|364 0.46|(0.03)|-0.26|(0.07) ***|
|Appliance ownership: Radio|58|0.59|(0.07)|364 0.60|(0.03)|-0.02|(0.07)|
|Appliance ownership: Gas stove|58|0.74|(0.06)|364 0.80|(0.02)|-0.06|(0.06)|
|Appliance ownership: Washing||||||||
|machine|58|0.02|(0.02)|364 0.11|(0.02)|-0.09|(0.04) **|

14
|Gas use for cooking|58|0.12|(0.04)<br>364|0.23|(0.02) -0.10 (0.06) *|
|---|---|---|---|---|---|
|Power use for lighting|58|0.64|(0.06)<br>364|0.64|(0.03) 0.00 (0.07)|
|Tapwater forcooking|58|0.71|(0.06)<br>364|0.52|(0.03) 0.19 (0.07)***|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

15
# **_5.2 Estimation methods_**

To deal with the abovementioned self-selection problem, two estimation techniques were primarily applied: (i) simple DID matching, and (ii) DID regression with covariates included. Subsequently, to verify the statistical robustness of the estimation results, the instrumental variable (IV) estimation was also partly used. The rationale behind the use of these different methods is that the impact evaluation is often sensitive to the estimation methods used. Different identification assumptions are required for different methods. In addition, each method has advantages and disadvantages. For instance, some methods—such as DID matching—are relatively simple to perform, while others— such as IV estimation—may require careful construction of the empirical model, because the validity of the model is examined on a case-by-case basis.

<u>DID matching estimator. The DID matching estimator simply compares the outcome averages in the</u> treatment and control groups in two separate periods (before and after the intervention). One advantage of the DID estimator is that it can control the unobserved heterogeneity between the treatment and control groups by mitigating the self-selection bias, as long as the time-variant factors of the selected outcome indicators are negligible (e.g., Todd 2008). As often discussed, however, it may be a strong assumption that no time-variant factor affects the outcome indicators (e.g., Jalan and Ravallion 1998). For instance, if the initial conditions between the treatment and control groups vary significantly, the development paths of the outcomes may also differ in important ways. Unfortunately, there is not much freedom to test this trend assumption in the data, because the data were only collected at two periods of time and there is no possibility to compare the time trends prior to and following the intervention.

To mitigate the risk of unbalanced characteristics, propensity score matching was combined with DID. This combination is normally expected to perform well in obtaining an experimental benchmark (Smith and Todd 2005; van de Walle and Mu 2008).<sup>18</sup> Propensity score matching is a useful technique to ensure comparability between the two groups, at least in a statistical sense, and is often used in the impact evaluation literature for the road sector (e.g., Lokshin and Yemtsov 2005; Mu and van de Walle 2011).

Since there are cross-section data from two periods of time, rather than panel data,<sup>19</sup> the simple DID matching estimator is arrived at in this manner: where _Y_ is outcome of household _i_ at time _t_ . Time _t_ is set at zero before project implementation (baseline) and unity after project completion (follow-up). _D_ denotes a dummy variable for treatment, which is set as unity if household _i_ received an intervention. _w_ is the weight given by kernel matching (Heckman, Ichimura and Todd 1997). _n_ is the number of households in the treatment group under the common support.

> 18 Propensity score matching is a statistical technique to match each treatment unit to a control unit that does not benefit from a program but has a similar probability of receiving the program, given all observed characteristics. It ensures that the treatment unit and control unit are comparable in a probabilistic sense.

> 19 It is not possible to match the observations between the baseline and follow-up surveys because no household identification was recorded in the surveys.

16
The kernel propensity score matching was performed with the initial observable characteristics presented in Tables 4 and 5. It ultimately corresponded well to the balancing property of the propensity score met, meaning that households with the same propensity scores have indifferent distributions of all relevant covariates. In the baseline data for Bico do Papagaio and the Southeast, four observations were located outside of the common support and were excluded from the sample. Twenty-nine observations were not supported in the case of Jalapão and the Northeast (Figure 3). These were also excluded from the analysis because they cannot be matched to any of the nonbeneficiary households.

**Figure 3: Predicted propensity scores of the treatment and control groups**

<!-- Start of picture text --> (Bico do Papagaio and Southeast) (Jalapão and Northeast)<br>.2 .4 .6 .8 1 .5 .6 .7 .8 .9 1<br>Propensity Score Propensity Score<br>Untreated Treated: On support Untreated Treated: On support<br>Treated: Off support Treated: Off support<br><!-- End of picture text --> <u>DID regression with covariate included. The second estimation method is the DID regression with</u> covariates included (after restricting the analysis to the common support). As mentioned above, one potential limit of the DID estimator comes from its assumption that there is no time-variant, groupspecific effect, meaning that the development trends would be the same regardless of the intervention. Should this not be the case, the DID estimator would not be valid. To mitigate this risk, time-variant household characteristics can be included on the right-hand side of the regression equation (e.g., Jalan and Ravallion 1998).

_X_ is a time-variant observable that can control potential differences in development paths between the two groups. Note that logarithms are taken of the dependent variable and all the covariates that are continuous.

Two methods are used to estimate Equation (2) when the outcome variable is a binary variable, as in the cases of car ownership and public bus use. One approach is the linear probability model in which the dependent variable is treated as continuous, although it takes either 0 or 1. A potential problem is that the predicted probabilities may be greater than 1 or less than 0.

The other approach is to use a probit model. An advantage of this model is that the predicted values are between 0 and 1. However, a disadvantage is that the evaluation of the coefficient _αDDREG_ becomes complex. The magnitude of the interaction effect, i.e., _Ditt_ , in a probit model is not merely the coefficient of the interaction term; it also depends on the independent variables (Ai and Norton 2003). Since both _Dit_ and _t_ are discrete variables, the interaction effect is estimated by: 17
 ˆ   2 _F_ <u></u> _X_ <u>, </u> ˆ <u></u> _DDREG_  _D_  _t_ (3)

# 6 Main estimation results

Both simple DID matching and DID regression have been performed. The estimation results, by and large, turned out to be similar to each other. See the Annex tables for the full estimation results of the DID regressions. The main findings are detailed below.

## **_6.1 Perceived benefits from the project_**

On the subjective level, people perceived various benefits from the project. Not surprisingly, in the Bico do Papagaio and Southeast regions, the proportion of households that confirmed they had benefited from the project is 18 to 20 percentage points higher in the treatment group (Table 7). In the case of Jalapão and the Northeast, evidence is less clear, although people consistently perceived benefits in terms of improved access to schools and workplaces.

The DID regression shows similar results, particularly for the Bico do Papagaio and Southeast regions. Households responded that they benefited from the project thanks to improved accessibility. In Jalapão and the Northeast, the results are less conclusive, but access to work seems to have improved significantly.

**Table 7: Estimated impacts on rural accessibility**

||Bico do<br>Southe<br>Simple<br>|Papagaio &<br>ast<br>average DID<br>|DID regression<br> <br>|<br>|Jalapão<br>Simple a<br>|& Northeast<br>verage DID<br>|<br>DID re<br>|gression<br>|
|---|---|---|---|---|---|---|---|---|
||Coef.|Std. Err.|Coef.<br>Std. Err.||Coef.|Std. Err.|Coef.|Std. Err.|
|Benefited from:|||||||||
|Improved access|||||||-||
|to health|0.199|(0.037) ***|0.201 (0.041)|***|-0.092|(0.069)|0.083|(0.120)|
|Improved access|||||||||
|to school|0.192|(0.036) ***|0.199 (0.040)|***|0.116|(0.067) *|0.159|(0.109)|
|Better access to<br>work|0.175|(0.036) ***|0.160 (0.039)|***|0.149|(0.066) **|0.190|(0.107) *|
|Easier personal<br>travel|0.185|(0.036)***|0.186 (0.040)|***|0.045|(0.069)|0.026|(0.119)|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

## **_6.2 Rural accessibility_**

As expected, rural accessibility was found to have improved, particularly in terms of distance and travel time to the nearest populated area and municipal center. In the Bico do Papagaio and Southeast regions, the distance to the nearest populated area is estimated to have been shortened by 6 km, and the travel time reduced by 13 minutes (Table 8). The distance to the nearest populated area in the Jalapão and Northeast regions was also found to have decreased by 25 km. The difference in the measured impacts seems attributable to the dramatically deteriorated rural accessibility in areas of the Jalapão and Northeast regions where the project was not implemented (Figure 4). Because the 18
sample size of the control group in these regions is very limited, statistical concerns may be raised with respect to the results.

Results are mixed regarding the distance and travel time to reach schools: they increased in the Bico do Papagaio and Southeast regions, and decreased in Jalapão and the Northeast. One possible factor may be related to the government’s recent policy involving the consolidation of many rural schools into larger schools, while providing for improved school bus services enabled by better roads. In fact, the use of public school buses has indeed increased in the Bico do Papagaio and Southeast regions. This has resulted in an increase of both distance and travel time to reach schools between the baseline and follow-up surveys. This assumption is also consistent with the fact that the average speed en route to schools increased from 9.7 to 16.8 km per hour in the project areas of these regions, as opposed to a smaller increase from 10 to 14 km per hour in the comparison group (Figure 5). The surveys do not indicate any impediment to reaching schools due to transport difficulties.

The positive results mentioned above may be tempered by the fact that the project did not aim to construct new road infrastructures, but rather to ensure year-round trafficability on existing roads. One possible explanation factor is that impassable roads in rainy seasons may have obliged road users to take alternative longer roads.

**Table 8: Estimated impacts on rural accessibility**

||Bico do<br>Southe|Papagaio &<br>ast|DID||Jalapão|& Northeast|||
|---|---|---|---|---|---|---|---|---|
||Simple|average DID|regressi|on|Simple|average DID|DID re|gression|
||Coef.|Std. Err.|Coef.|Std. Err.|Coef.|Std. Err.|Coef.|Std. Err.|
|**Distance (km) to:**|||||||||
|Nearest populated|||||||||
|place|-6.07|(1.04) ***|-0.37|(0.29)|-25.40|<br>(3.10) ***|-2.18|<br>(0.82) ***|
|Municipal center|-3.37|(1.68) **|-0.36|(0.15) **|1.09|<br>(5.34)|0.19|<br>(0.37)|
|Nearest hospital|-1.02|(1.70)|-0.18|(0.16)|-0.65|<br>(3.27)|0.64|<br>(0.56)|
|School|10.01|(4.96) **|0.60|(0.19) ***|-9.51|<br>(2.37) ***|-0.38|<br>(0.45)|
|**Time (minutes) to:**|||||||||
|Nearest populated|-||||||||
|place|12.93|(6.57) **|-0.01|(0.10)|-15.10|(11.08)|-0.28|<br>(0.22)|
|Municipal center|-9.38|(8.94)|-0.08|(0.07)|-23.26|(16.90)|-0.37|<br>(0.14) ***|
|Nearest hospital|-3.50|(5.94)|-0.11|(0.08)|-11.26|(10.87)|-0.01|<br>(0.28)|
|School|15.71|(6.16)**|0.42|(0.10)***|-4.61|<br>(4.62)|-0.14|<br>(0.29)|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

# **Figure 4: Distance to the nearest populated area: simple average comparison**

**(Bico do Papagaio and Southeast)**

**(Jalapão and Northeast)**

19
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# **Table 10: Estimated impacts** **<u>on modal choice</u>**

||Bico do<br>Southe<br>Simple|Papagaio &<br>ast<br>average DID|DID regression||Jalapão & Northeas<br>Simple average<br>DID|t<br>DID regression||
|---|---|---|---|---|---|---|---|
||Coef.|Std. Err.|Linear Prob. Model<br>Coef.<br>Std. Err.|Probit<br>Coef.Std. Err.|Coef.Std. Err.|Linear Prob. Model<br>Coef.<br>Std. Err.|Probit<br>Coef.<br>Std. Err.|
|Public bus use (dummy var|iable) to|reach:||||||
|Nearest populated place|-0.02|(0.02)|0.00 (0.02)|0.24 (0.20)|-0.08 (0.03) ***|-0.05 (0.06)|-0.58 (0.56)|
|Municipal center|0.04|(0.03)|0.08 (0.03) **|0.44 (0.14) ***|0.05 (0.05)|0.08 (0.08)|0.58 (0.43)|
|Nearest hospital|0.03|(0.03)|0.07 (0.03) **|0.34 (0.15) **|0.03 (0.04)|0.06 (0.06)|0.66 (0.55)|
|School|0.03|(0.01) ***|0.03 (0.01) **|3.97 (0.23) ***|0.00 (0.01)|0.00 (0.00)||
|Individual car use (dummy|variable|) to reach:||||||
|Nearest populated place|0.05|(0.02) ***|0.05 (0.02) ***|0.53 (0.23) **|0.10 (0.03) ***|0.06 (0.06)|4.73 (0.67) ***|
|Municipal center|0.07|(0.02) ***|0.06 (0.02) **|0.36 (0.17) **|0.11 (0.03) ***|0.08 (0.06)|1.09 (0.56) **|
|Nearest hospital|0.04|(0.01) ***|0.08 (0.02) ***|0.45 (0.16) ***|0.23 (0.03) ***|0.15 (0.05) ***|5.88 (0.65) ***|
|School|0.07|(0.02) ***|0.04 (0.01) ***|0.72 (0.30) **|0.15 (0.03) ***|0.08 (0.05) *|5.79 (0.75) ***|
|Transport equipment owne|<br>rship (d|<br>ummy varia|<br>ble):|||||
|Bicycle|0.08|(0.04) **|0.07 (0.04) *|0.17 (0.12)|0.12 (0.07) *|-0.01 (0.10)|0.05 (0.36)|
|Motorcycle|0.01|(0.03)|-0.01 (0.04)|0.00 (0.13)|0.15 (0.06) **|0.13 (0.08)|0.32 (0.42)|
|Car|0.04|(0.02)*|0.04(0.03)*|0.22(0.16)|0.07 (0.04)*|0.06 (0.06)|0.36 (0.63)|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

22
# 6.5 Social benefits

The educational impact of improved roads is found to be partially positive in the Bico do Papagaio and Southeast regions. The number of girls attending school in these two regions has increased by 0.03 and 0.59 (average number of kids per household), respectively, based on the simple average DID model and the DID regression model.<sup>20</sup> The number of households with children who cannot attend school due to poor road conditions experienced a statistically significant decline, although the number was very small even before the project’s launch (Table 11).

In contrast, the impacts on school attendance are all negative in Jalapão and the Northeast; some of them are statistically significant. The main reason for this evolution is the substantial increase in the control group’s school attendance, while the treatment group (Figure 7) remained stable for the most part.

The health impacts are inconclusive in all regions. Most of the estimated impacts are not statistically significant. The number of households that have experienced transport-related difficulties in visiting hospitals declined in Bico do Papagaio and the Southeast, but increased in the Northeast and Jalapão. The number of household members who were sick during the two months prior to the survey declined from about 0.3–0.4 to about 0.15–0.2 across the regions. However, the trend was similar among both the treatment and control groups. This prevented the perception of any net impact resulting from the road project.

**Table 11: Estimated impacts on education and health**

||Bico do<br>Southea<br>Simple a|Papagaio &<br>st<br>verage DID|DID regression|Jalapão<br>Northea<br>Simpl|&<br>st<br>e average DID DID re|gression|
|---|---|---|---|---|---|---|
||Coef.|Std. Err.|Coef.Std. Err.|Coef.S|td. Err.<br>Coef.|Std. Err.|
|HH with children<br>who could not|||||||
|attend school due to|||||||
|road conditions|-0.009|(0.004)<br>**|-0.008 (0.003) **|-0.003|(0.005)<br>-0.001|9 (0.002)|
|Number of children i<br>who attend school:|n HH||||||
|Total|0.28|(0.11) **|0.43 (0.19) **|-0.74|(0.20) ***<br>-0.59|(0.41)|
|Boys|0.03|(0.07)|0.16 (0.18)|-0.24|(0.14) *<br>-0.21|(0.46)|
|Girls|0.03|(0.07) ***|0.59 (0.18) ***|-0.51|(0.10) ***<br>-1.23|(0.43) ***|
|Preschool|<br>0.03|<br>(0.04)|<br>0.15 (0.13)|<br>-0.09|<br> <br>(0.06)<br>-0.51|<br>(0.42)|
|Elementary school|0.15|(0.11)|0.14 (0.17)|-0.42|(0.17) **<br>-0.72|(0.39) *|
|Secondary school|-0.01|(0.04)|0.24 (0.14) *|-0.16|(0.06) ***<br>-0.25|(0.28)|
|<br>University|<br>0.00|<br>(0.01)|<br>0.00 (0.05)|<br>0.04|<br> <br>(0.02) **<br>0.18|<br>(0.11)|
|<br>HH having difficulty<br>reaching hospital|||||<br>||
|due to road<br>conditions|-0.008|(0.007)|-0.005 (0.007)|0.07|(0.02) ***<br>0.04|(0.03)|
|Number of HH|||||<br>||
|members who were|||||||
|sick(last2 months)|-0.05|(0.07)|0.08 (0.18)|-0.17|(0.14)<br>-0.19|(0.56)|

> 20 In fact, the absolute number of girls attending schools has decreased in both the treatment and control groups, but the reduction was smaller in the treatment group than in the control group. This may be related to the fact that the total number of children aged 5 to 9 years has been declining in the State of Tocantins (IBGE 2012).

23
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# 7 Discussion

## 7.1 Robustness check

As mentioned previously, verifying the robustness of the above results through the use of different methods is important because impact evaluations are sometimes sensitive to empirical specifications. For the present evaluation, the instrumental variable (IV) estimator was used to check such robustness,<sup>24</sup> but was applied only for the first group (the Bico do Papagaio and Southeast regions) in cases where the required information was available (notably, the detailed location of the project works). The main challenge in estimating Equation (2) is the endogeneity of the project’s localization, i.e., _Dit_ . In theory, the instruments must be independent from the outcome variables but relevant to the project localization decision.

Several ways of constructing instruments exist in the literature. When Chandra and Thompson (2000) examined the impact of the U.S. interstate highways on earnings of firms, they argued that the non-metropolitan counties served by highways were thought to have received the new highway as an exogenous benefit, because the interstate highway’s first aim was to connect metropolitan areas. Banerjee et al. (2012) applied the same concept to the Chinese railways case, calculating the distance from counties to straight lines connecting historic cities and ports.<sup>25</sup> Gibson and Rozelle (2003) used, as an instrument, the timing in which the national highway system penetrated into each district in Papua New Guinea, demonstrating that a community’s proximity to a highway resulted in a higher likelihood of receiving a feeder road.

Two instruments were constructed to verify the robustness of the above results in the present evaluation, so as to assess whether there could be a correlation between the localization of the works on the rural roads and the proximity to existing paved federal and state road networks, as discussed by Gibson and Rozelle (2003): (i) the distance from each community to the nearest paved state road before the project; and (ii) a dummy variable representing the existence of a paved state road in each municipality. The data are based on information about the state road network prior to 2005, just before the civil works got under way, to avoid further endogeneity between the works localization and the outcome variables. Notably, during the intervention period the government was not only investing in rural roads but also upgrading state highways.

Both (i.e., distance to the nearest paved state road before project commencement and the dummy variable representing the existence of a paved state road) were found to be valid, with signs contrary to prior expectations. Table 13 shows the first-stage regression result with household income used as an outcome variable. All indications are that a community is more likely to receive rural road intervention if it lacks good access to the state’s main road network. This may be consistent with the objective of the project in Tocantins, which focused in particular on lagging, remote communities situated in critical spots along the municipal road network. This result tends to demonstrate that rural road improvement localizations are likely to be based on the level of their connectivity to state or federal roads.

Statistically, both instruments have significantly negative coefficients, possibly suggesting that the civil works were implemented earlier in the areas where road connectivity was worse. The evidence indicates that the probability of having civil works executed at the earlier stage of the project was high when a municipality did not have any paved state road. The work was also likely to get under way early if a community was located far from the paved state road network. These instruments are found to be valid in the sense that they can be treated as excluded variables and are not correlated

> 24 When the outcome variable is a binary, the instrumental variable probit model is used.

> 25 In the context of dynamic panel estimation, lagged variables of household characteristics may also be used as a set of instruments (Dercon et al. 2008).

26
with the error terms. Both the Sagan overidentifying restriction test and the Hausman exogeneity test statistics are shown for each regression result in the Annex tables.

The IV estimation results are broadly consistent with the DID regression results (Table 14). Rural accessibility to a populated area would likely be improved, but not to a school. Overall use of public transportation increased, as did the use of individual cars. However, the impact on individual car ownership disappeared. There was a visible positive impact on girls’ school attendance. In contrast to the above DID result, the IV estimation indicates that the project might have resulted in increased jobs in both the service and public sectors.

Although economic impacts exist, they may be statistically weak. The DID regression estimated a significant coefficient of household income increase only in the Bico do Papagaio and Southeast regions. When evaluated at the sample means, the marginal effect is appraised at R$59.8, with a standard error of 36.5. This is smaller than the previous estimate, but is more or less consistent.

In terms of employment, the significance of the impact on agricultural jobs disappeared in both pairs of regions. However, the _p_ -value of the coefficient of agricultural employment remains relatively high, at 0.113, in the Bico do Papagaio and Southeast regions. Similarly, in the Jalapão and Northeast regions, the _p-_ value is relatively high for public sector jobs, at 0.162. These figures are consistent with the above simple DID matching estimates.

**Table 13: First-stage regression of IV estimation on household income**

|Dependent variable= _D_|Coef.<br>S|td. Err.|
|---|---|---|
|Municipality having paved state road|-0.384|(0.069) ***|
|lnDistance to paved state road|-0.030|(0.005) ***|
|ln HH size|-0.026|(0.043)|
|Adult share|-0.042|(0.088)|
|HH head sex: Male|-0.036|(0.051)|
|HH head education: Elementary|-0.018|(0.036)|
|HH head education: Secondary|0.026|(0.062)|
|HH head education: University|-0.042|(0.128)|
|Appliance ownership: Refrigerator|-0.040|(0.053)|
|Appliance ownership: Color TV|-0.141|(0.049) ***|
|Appliance ownership: Radio|-0.034|(0.032)|
|Appliance ownership: Gas stove|-0.113|(0.052) **|
|Appliance ownership: Washing<br>machine|0.070|(0.038) *|
|Gas use for cooking|-0.059|(0.037)|
|Power use for lighting|-0.057|(0.053)|
|Tap water for cooking|-0.110|(0.033) ***|
|Constant|1.388|(0.161)***|
|Obs.|859||
|R-squared|0.15||
|F-stat|10.67||

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

**Table 14: IV OLS/Probit estimation results**

|Dependent variable|IV OLS or IV probit|
|---|---|
||Coef.<br>Std.Err.|
|Rural accessibility||
|Distance to:||

27
|Populated area<br>-2.414|(1.004) **|
|---|---|
|Municipal capital<br>-0.536|(0.628)|
|Hospital<br>-0.631|(0.671)|
|School<br>2.550|(0.727) ***|
|Travel time to:<br> <br>||
|Populated area<br>0.274|(0.417)|
|Municipal capital<br>-0.146|(0.242)|
|Hospital<br>-0.438|(0.281)|
|School<br>1.007|(0.297) ***|
|Demand for mobility||
|No. of trips to:||
|Buy food<br>-1.239|(0.472) ***|
|Buy goods<br>0.105|(0.167)|
|Go to work<br>0.785|(0.602)|
|Do business<br>-0.295|(0.469)|
|Visitfriends/relatives<br>-0.156|(0.383)|
|Use of public bus to reach:||
|Populated area<br>1.015|(0.712)|
|Municipal capital<br>1.298|(0.493) ***|
|Hospital<br>1.675|(0.521) ***|
|School||
|Use of vehicle to reach:||
|Populated area<br>1.365|(0.796) *|
|Municipal capital<br>0.170|(0.530)|
|Hospital<br>-0.427|(0.518)|
|School<br>1.707<br>|(0.928) *|
|Transport equipment||
|ownership||
|Bicycle<br>0.366|(0.399)|
|Motorcycle<br>0.508|(0.398)|
|Vehicle<br>-0.168|(0.525)|
|Education||
|No. of students||
|All<br>1.003|(0.608) *|
|Boys<br>0.739|(0.533)|
|Girls<br>0.878|(0.535) *|
|Preschool<br>-1.191|(0.437) ***|
|Elementary<br>-0.261|(0.519)|
|Secondary<br>0.334|(0.458)|
|University<br>-0.007|(0.165)|
|Health||
|No.ofsick HH members<br>-0.613|(0.500)|
|Economic benefits||
|No. of HH members engaged in:||
|Agriculture<br>0.098|(0.671)|
|Industry<br>0.057|(0.062)|
|Commerce<br>0.109|(0.185)|
|Service<br>0.321|(0.151) **|
|Public sector<br>0.950|(0.371) ***|
|HH monthlyincome<br>0.290|(0.223)|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

28
# 7.2 Investment policy implications

The above estimation results have several important policy implications. First, they indicate that improved rural roads have had a certain impact on development outcomes in some areas, as exemplified by the shift in transport modal choice or increased school attendance by girls. Meanwhile, economic impacts on households—such as job creation and household income—have proved to be weaker, although with an overall positive impact.

Furthermore, the impact evaluation results could be used for the cost–benefit analysis of rural road interventions, for which the suitability of the traditional evaluation approach with respect to roaduser benefits is limited. In the case of Tocantins, household monthly income increased by an estimated US$40–$70 on average. At a US$40 increase per household and month, under a conservative approach and a reasonable economic assumption,<sup>26</sup> rural road investment becomes justified when it serves more than 80 households, reaching a 12 percent internal rate of return (IRR). The graph below (Figure 9) illustrates the IRR in relation to the number of beneficiaries along each road section. Although this finding is interesting, it should not be seen as the only driver for designing a policy on transport investments, because other elements—for instance, economic development and social benefits perspectives, which are often not measured quantitatively—can also be taken into account to justify particular investments.

**Figure 9: Predicted rate of return and number of beneficiaries**

<!-- Start of picture text --> 30%<br>25%<br>20%<br>15%<br>10%<br>5%<br>0%<br>-5%<br>-10%<br>-15%<br>-20%<br>0 25 50 75 100 125 150<br>Number of households along a project road<br>Internal rate of return<br><!-- End of picture text --> Finally, the impact evaluation results show that the improvement of transport should be coordinated with other sectoral policies. For example, the project was found to have increased the number of children attending school, with an estimated 300 children in 1,100 households surveyed<sup>27</sup> (with the DID matching result, the magnitude of the impact is estimated at 0.284 per household). School capacity should be increased accordingly, because without such adequate capacity, social benefits from improved rural roads would likely be offset by lower quality of education. Similarly, improved public transport policy should be coordinated: evidence shows that people’s use of public buses increased following project completion. According to the simple DID matching estimates, the probability of using a bus to reach a populated area would increase by 3.2 percent.

> 26 The project life is assumed to be 30 years. The average investment cost is about US$267,000 per intervention road. Note that each road may have four to five civil works, including bridges and culverts. The maintenance cost is assumed to be 1.5 percent of the initial investment cost.

> 27 With the DID regression result, the marginal effect is estimated at 0.147 per household.

29
# 7.3 Lessons learned for improving impact evaluation design

The implementation of this impact evaluation raised methodological and practical lessons. First, it is essential to define and maintain a representative control group to carry out a rigorous evaluation of a project or program. In the present exercise, household surveys have been carried out only where civil works were planned, for the reasons mentioned above. The retrofit pipeline comparison only worked partially, resulting in an unbalanced sample size between the treatment and control groups. In Jalapão and the Northeast, the control group had only 60 households, far fewer than the treatment group composed of 360. Maintaining the comparability between the treatment and control groups is also essential to avoid bias in the comparison. At the design stage, each treatment community should be paired with one control community located within the same municipality and sharing similar characteristics, for the sake of comparability. Important loopholes may appear in the course of the evaluation if, as is likely to occur in such exercises over the long term, the control groups end up benefiting from road improvements. In addition, it is important to collect as many observables as possible in an effort to control the potential heterogeneity of the two groups. In the case of Tocantins, the data clearly show significant differences in household characteristics between the treatment and control groups, mainly because the sample of the control group was limited to one of the two regions in both the first and second groups. In the present case, a matching DID method was used to control differences in characteristics between groups.

It is similarly important to ensure comparability between baseline and follow-up surveys. In theory, identical households or communities should have been interviewed before and after interventions to develop panel data. In the present evaluation, the follow-up surveys could not be implemented in the same households because the location of the households interviewed for the baseline was not documented. As a result, the evaluation is not based on panel data. This is considered a significant design flaw because it complicates intertemporal comparability. Improvements in future impact evaluations may be achieved by recording household identification and/or geo-references of surveyed households.

The timing of the follow-up survey(s) is also a critical aspect: although direct and physical outcomes, such as travel time to the nearest hospital, can be observed immediately after project completion, it may take some time to observe other indirect socioeconomic impacts, such as job creation and health outcomes. It would be useful to carry out multiple follow-up surveys over the long run, although longer-term evaluations also run the risk of losing part of the control group for the reasons mentioned above.

Coordination among the managers of the works and the team in charge of impact evaluation is essential to ensure appropriate timing and location of the surveys. In fact, the timing of the works must often adapt to particular field constraints (delays due to administrative procedures or weather conditions, relocation of works, etc.). In the present evaluation, even basic information, such as the works’ location and schedule, have not always been made available on time.

The questionnaires used for the interviews must be extremely well conceived and customized to the project’s particular design and context. For example, although questions about the transport distance or time traveled for a particular activity seemed pertinent a priori, with hindsight the questionnaire should rather have focused on the number of impediments to travel due to inclement weather over the past 6 to 12 months (to cover seasonality). This type of question would have been more effective in view of achieving spot improvement works on rural roads, thus allowing for year-round transport. Moreover, in retrospect, interviewees offered very subjective responses when asked about distances. Other questions, such as those related to illness, seem to have little bearing on the project. Alternatively, a question about the frequency of foregone medical care due to transport problems would have been more pertinent.

30
Finally, at the analytical stage, it is worthwhile to test several different estimation techniques to verify the robustness of the results. In certain cases, different techniques may potentially generate different results, whereas in other cases results may not differ regardless of the applied method. It is important to maintain flexibility in data collection to permit the application of several analytic techniques. In the case of Tocantins, it was worth the effort to find appropriate instruments to perform the IV estimation, which is based on completely different empirical settings from those of the DID estimators.

The present exercise demonstrated that impact evaluations of transport projects aimed at improving accessibility are feasible but difficult to implement. Looking ahead, the challenge of designing an impact evaluation methodology for projects that seek to improve major existing road works (such as rehabilitation and/or upgrading of national roads, which constitute an important part of the Bank’s portfolio in the transport sector) remains on the agenda.

# 8 Conclusion

Many rural residents still have only limited access to good road infrastructure in the developing world. A wide range of social and economic impacts can emerge from rural road development, from physical connectivity improvements (i.e., shorter distances and travel times) to long-term economic impacts, such as job creation and welfare improvement.

The current paper revisited the question of the economic and social benefits related to rural road development. Using household survey data from the State of Tocantins, Brazil, three different estimation techniques are applied to check the validity of the results: DID matching, DID regression, and IV estimators.

Overall, the analysis shows that improved rural road connectivity changed the population’s choices with respect to modes of transportation. Following the rural road intervention, members of the impacted communities increasingly began to use public buses and individual cars. Furthermore, evidence indicates that the project increased school attendance, particularly by girls. Although statistically weak in relative terms, the evaluation indicates that the project contributed to increasing household income and creating more agricultural jobs in certain regions. Because some impacts require longer gestation periods, follow-up surveys and analyses will be required to more precisely capture the values of the entire set of impacts.

31
# 9 References

Ai, Chunrong and Edward Norton. 2003. “Interaction Terms in Logit and Probit Models.” _Economics Letters_ 80: 123–129.

Banerjee, A., E. Duflo, and N. Qian. 2012. “On the Road: Access to Transportation Infrastructure and Economic Growth in China.” NBER Working Paper No. 17897.

Boudier-Bensebaa, Fabienne. 2005. “Agglomeration Economies and Location Choice.” _Economics of Transition_ 13: 605–628.

Briceno-Garmendia, C., K. Smits, and V. Foster. 2008. “Financing Public Infrastructure in Sub-Saharan Africa: Patterns and Emerging Issues.” Background Paper No. 15, Africa Infrastructure Country Diagnostic, The World Bank.

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33
# X. Annex Tables

## **<u>Table 15: DID Regression (1)</u>**

||Distance t<br>Populated|<br>o:<br> area|<br>Municipal|<br>capital|Hospital||School||
|---|---|---|---|---|---|---|---|---|
|D|-0.215|(0.198)|0.454|(0.066) ***|0.338|(0.074) ***|-0.125|(0.113)|
|T|-0.967|(0.213) ***|-0.275|(0.111) **|-0.192|(0.124)|-0.112|(0.149)|
|D*T|-0.369|(0.289)|-0.357|(0.152) **|-0.184|(0.165)|0.600|(0.190) ***|
|lnHH size|-0.145|(0.192)|0.290|(0.114) **|0.207|(0.118) *|0.001|(0.131)|
|Adult share|0.408|(0.407)|0.251|(0.217)|0.122|(0.229)|0.682|(0.265) ***|
|HH head sex: Male|0.534|(0.211) **|-0.271|(0.133) **|-0.285|(0.142) **|-0.390|(0.147) ***|
|HH head education: Elementary|0.335|(0.170) **|0.139|(0.090)|-0.048|(0.092)|-0.149|(0.110)|
|HH head education: Secondary|0.011|(0.298)|0.108|(0.163)|0.041|(0.173)|0.093|(0.188)|
|HH head education: University|-0.054|(0.643)|0.411|(0.333)|0.110|(0.373)|0.101|(0.409)|
|Appliance ownership: Refrigerator|0.297|(0.243)|0.070|(0.138)|0.011|(0.132)|0.200|(0.153)|
|Appliance ownership: Color TV|0.086|(0.228)|0.001|(0.128)|-0.149|(0.127)|-0.300|(0.144) **|
|Appliance ownership: Radio|0.064|(0.153)|-0.005|(0.079)|-0.040|(0.085)|0.033|(0.097)|
|Appliance ownership: Gas stove|0.351|(0.216) *|0.074|(0.114)|-0.011|(0.107)|0.174|(0.136)|
|Appliance ownership: Washing|||||||||
|machine|-0.441|(0.208) **|-0.322|(0.118) ***|-0.383|(0.138) ***|-0.070|(0.137)|
|Gas use for cooking|-0.339|(0.192) *|0.087|(0.104)|-0.102|(0.125)|-0.253|(0.124) **|
|Power use for lighting|-0.876|(0.242) ***|-0.377|(0.129) ***|-0.342|(0.130) ***|-0.575|(0.148) ***|
|Tap water for cooking|0.752|(0.158) ***|0.131|(0.087)|0.066|(0.093)|-0.557|(0.101) ***|
|Constant|-0.348|(0.608)|2.503|(0.335)***|2.948|(0.370)***|0.444|(0.415)|
|Obs.|2064||2064||2064||2064||
|R-squared|0.063||0.059||0.054||0.075||
|F-stat|8.85||9.09||7.91||10.37||

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

34
# **Table 16: DID regression (2)**

||Travel tim<br>Populated|e to:<br>area|Municipal|capital|Hospital||School||
|---|---|---|---|---|---|---|---|---|
|D|0.496|(0.066) ***|0.426|(0.050) ***|0.362|(0.053) ***|0.003|(0.072)|
|T|-0.204|(0.069) ***|0.020|(0.055)|0.088|(0.056)|0.194|(0.080) **|
|D*T|-0.009|(0.100)|-0.081|(0.071)|-0.109|(0.076)|0.416|(0.102) ***|
|lnHH size|0.060|(0.065)|0.079|(0.049) *|0.050|(0.053)|0.002|(0.070)|
|Adult share|0.099|(0.139)|-0.017|(0.100)|-0.056|(0.111)|0.307|(0.146) **|
|HH head sex: Male|0.222|(0.070) ***|0.066|(0.056)|0.028|(0.061)|-0.046|(0.083)|
|HH head education: Elementary|0.000|(0.061)|0.082|(0.042) **|0.001|(0.043)|-0.134|(0.060) **|
|HH head education: Secondary|-0.284|(0.105) ***|-0.077|(0.074)|-0.212|(0.087) **|-0.231|(0.097) **|
|HH head education: University|-0.417|(0.226) *|-0.113|(0.173)|-0.375|(0.196) *|-0.333|(0.228)|
|Appliance ownership: Refrigerator|-0.108|(0.085)|-0.061|(0.061)|-0.006|(0.067)|0.026|(0.089)|
|Appliance ownership: Color TV|-0.088|(0.078)|-0.120|(0.055) **|-0.203|(0.062) ***|-0.212|(0.077) ***|
|Appliance ownership: Radio|0.100|(0.053) **|-0.034|(0.037)|0.011|(0.042)|0.074|(0.053)|
|Appliance ownership: Gas stove|-0.154|(0.075) **|-0.167|(0.051) ***|-0.177|(0.055) ***|-0.140|(0.077) *|
|Appliance ownership: Washing|||||||||
|machine|-0.062|(0.067)|-0.242|(0.052) ***|-0.178|(0.057) ***|-0.081|(0.069)|
|Gas use for cooking|-0.078|(0.062)|-0.011|(0.047)|0.027|(0.053)|-0.110|(0.063) *|
|Power use for lighting|-0.302|(0.080) ***|-0.287|(0.060) ***|-0.281|(0.067) ***|-0.372|(0.084) ***|
|Tap water for cooking|0.003|(0.052)|-0.099|(0.038) ***|-0.181|(0.043) ***|-0.439|(0.054) ***|
|Constant|3.384|(0.209)***|4.068|(0.161)***|4.171|(0.173)***|2.861|(0.225)***|
|Obs.|1,375||1,976||1,908||1,946||
|R-squared|0.216||0.208||0.091||0.159||
|F-stat|23.48||30.05||10.25||22.03||

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

35
# **Table 17: DID Regression (3)**

||No. of trips<br>Buy food|to:<br>|Buy goo|ds|Go to w|ork|Do busi|ness|Visit fri|ends/relatives|
|---|---|---|---|---|---|---|---|---|---|---|
|D|0.494|(0.129) ***|-0.036|(0.060)|-0.154|(0.163)|-0.109|(0.101)|0.063|(0.093)|
|T|-0.155|(0.140)|-0.125|(0.053) **|-0.926|(0.180) ***|0.109|(0.119)|-0.013|(0.097)|
|D*T|-0.885|(0.169) ***|0.047|(0.069)|0.237|(0.213)|-0.031|(0.144)|0.035|(0.126)|
|lnHH size|0.145|(0.111)|0.125|(0.043) ***|0.189|(0.133)|0.229|(0.093) **|-0.054|(0.080)|
|Adult share|0.258|(0.240)|0.281|(0.099) ***|-0.600|(0.278) **|0.420|(0.208) **|-0.002|(0.165)|
|HH head sex: Male|0.245|(0.138) *|0.050|(0.056)|-0.794|(0.129) ***|-0.155|(0.094) *|0.001|(0.093)|
|HH head education: Elementary|0.008|(0.094)|0.065|(0.034) *|0.146|(0.111)|0.204|(0.074) ***|0.043|(0.071)|
|HH head education: Secondary|0.032|(0.167)|0.046|(0.059)|0.804|(0.239) ***|0.269|(0.155) *|0.142|(0.142)|
|HH head education: University|0.263|(0.371)|0.121|(0.168)|0.415|(0.465)|0.497|(0.355)|0.651|(0.385) *|
|Appliance ownership: Refrigerator|-0.183|(0.135)|0.016|(0.055)|0.267|(0.168)|0.017|(0.108)|-0.009|(0.107)|
|Appliance ownership: Color TV|0.150|(0.128)|0.032|(0.049)|-0.082|(0.154)|0.129|(0.102)|-0.242|(0.100) **|
|Appliance ownership: Radio|-0.129|(0.088)|0.059|(0.033) *|0.102|(0.109)|-0.075|(0.071)|-0.036|(0.065)|
|Appliance ownership: Gas stove|0.200|(0.120) *|-0.048|(0.051)|-0.042|(0.142)|0.046|(0.095)|0.054|(0.092)|
|Appliance ownership: Washing<br>machine|0.064|(0.114)|-0.008|(0.047)|0.153|(0.150)|-0.220|(0.097) **|0.049|(0.087)|
|Gas use for cooking|0.029|(0.107)|-0.001|(0.042)|0.178|(0.140)|0.015|(0.096)|0.063|(0.083)|
|Power use for lighting|0.013|(0.127)|-0.023|(0.051)|0.238|(0.159)|-0.133|(0.102)|0.044|(0.102)|
|Tap water for cooking|-0.180|(0.089) **|-0.013|(0.035)|-0.008|(0.115)|0.209|(0.075) ***|-0.015|(0.065)|
|Constant|-4.252|(0.357)***|-4.860|(0.140)***|-2.299|(0.425)***|-4.617|(0.294)***|-4.098|(0.252)***|
|Obs.|2,064||2,064||2,064||2,064||2,064||
|R-squared|0.053||0.013||0.062||0.021||0.011||
|F-stat|7.11||1.17||8.02||2.29||1.09||

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

36
# **Table 18: DID Regression (4)**

||Bus for po|pulated area|||Bus for m<br>capital|unicipal|||
|---|---|---|---|---|---|---|---|---|
||Linearpro|bability|Probit||Linearpro|bability|Probit||
|D|0.046|(0.017) ***|0.296|(0.120) **|0.071|(0.024) ***|0.265|(0.094) ***|
|T|-0.017|(0.015)|-0.322|(0.180) *|-0.046|(0.024) *|-0.311|(0.126) **|
|D*T|-0.0006|(0.0213)|0.238|(0.199)|0.081|(0.032) **|0.442|(0.144) ***|
|lnHH size|0.001|(0.016)|-0.003|(0.119)|0.009|(0.023)|0.036|(0.090)|
|Adult share|-0.017|(0.033)|-0.132|(0.254)|-0.071|(0.048)|-0.272|(0.190)|
|HH head sex: Male|0.000|(0.017)|0.016|(0.133)|-0.008|(0.027)|-0.004|(0.105)|
|HH head education: Elementary|0.010|(0.013)|0.073|(0.097)|-0.017|(0.020)|-0.075|(0.075)|
|HH head education: Secondary|-0.028|(0.020)|-0.286|(0.231)|-0.093|(0.031) ***|-0.422|(0.158) ***|
|HH head education: University|-0.063|(0.015) ***|||-0.112|(0.052) **|-0.590|(0.371)|
|Appliance ownership: Refrigerator|0.004|(0.018)|0.053|(0.142)|-0.013|(0.029)|-0.042|(0.107)|
|Appliance ownership: Color TV|-0.040|(0.017) **|-0.334|(0.128) ***|-0.032|(0.027)|-0.121|(0.099)|
|Appliance ownership: Radio|-0.004|(0.012)|-0.028|(0.090)|-0.021|(0.018)|-0.077|(0.069)|
|Appliance ownership: Gas stove|0.003|(0.018)|0.025|(0.111)|-0.029|(0.026)|-0.102|(0.089)|
|Appliance ownership: Washing|||||||||
|machine|-0.003|(0.014)|-0.031|(0.132)|-0.041|(0.021) *|-0.177|(0.099) *|
|Gas use for cooking|0.021|(0.014)|0.213|(0.117) *|0.018|(0.021)|0.080|(0.090)|
|Power use for lighting|-0.041|(0.017) **|-0.297|(0.114) ***|-0.018|(0.028)|-0.065|(0.101)|
|Tap water for cooking|0.034|(0.012) ***|0.285|(0.089) ***|0.042|(0.018) **|0.172|(0.071) **|
|Constant|0.088|(0.050)*|-1.411|(0.368)***|0.264|(0.075)***|-0.659|(0.288)**|
|Obs.|2,064||2,036||2,064||2,064||
|R-squared|0.032||||0.044||||
|F-stat|5.53||||6.84||||
|Pseudo-R2|||0.065||||0.050||
|Wald-stat|||69.93||||90.86||
|Z-statfor interactioneffect (mean& s|td.dev.)||0.604|(0.107)|||2.761|(0.214)|
|Note: Standard errors are shown in par|entheses. *, *|*, *** indicate|the statistic|al significanc|e at 10%, 5|% and 1%, re|spectively.||

37
||||**Table 19: D**|**ID Regressio**|**n(5)**||||
|---|---|---|---|---|---|---|---|---|
||Bus for ho<br>Linear pro|spital<br>bability|Probit||Bus for sch<br>Linear pro|ool<br>bability|Probit||
|D|0.077|(0.023) ***|0.325|(0.098) ***|0.016|(0.009) *|0.362|(0.204) *|
|T|-0.010|(0.023)|-0.132|(0.130)|-0.005|(0.006)|-3.651|(0.182) ***|
|D*T|0.066|(0.031) **|0.342|(0.148) **|0.027|(0.012) **|3.969|(0.234) ***|
|lnHH size|0.014|(0.022)|0.063|(0.091)|0.004|(0.010)|0.076|(0.167)|
|Adult share|-0.040|(0.047)|-0.154|(0.193)|0.003|(0.017)|0.028|(0.333)|
|HH head sex: Male|-0.001|(0.026)|0.020|(0.106)|-0.002|(0.010)|-0.011|(0.212)|
|HH head education: Elementary|-0.011|(0.019)|-0.051|(0.076)|-0.012|(0.008)|-0.187|(0.126)|
|HH head education: Secondary|-0.080|(0.029) ***|-0.393|(0.159) **|-0.030|(0.008) ***|||
|HH head education: University|-0.134|(0.039) ***|-0.914|(0.451) **|-0.028|(0.008) ***|||
|Appliance ownership: Refrigerator|0.004|(0.027)|0.020|(0.110)|0.001|(0.012)|0.000|(0.203)|
|Appliance ownership: Color TV|-0.045|(0.026) *|-0.179|(0.101) *|-0.013|(0.012)|-0.208|(0.183)|
|Appliance ownership: Radio|-0.015|(0.017)|-0.058|(0.070)|0.010|(0.007)|0.199|(0.140)|
|Appliance ownership: Gas stove|-0.035|(0.025)|-0.126|(0.090)|0.009|(0.011)|0.186|(0.171)|
|Appliance ownership: Washing|||||||||
|machine|-0.035|(0.021) *|-0.156|(0.101)|-0.013|(0.008)|-0.316|(0.209)|
|Gas use for cooking|0.028|(0.021)|0.128|(0.092)|-0.010|(0.006) *|-0.355|(0.217) *|
|Power use for lighting|-0.019|(0.026)|-0.069|(0.101)|0.012|(0.010)|0.260|(0.169)|
|Tap water for cooking|0.010|(0.017)|0.054|(0.072)|-0.008|(0.007)|-0.177|(0.136)|
|Constant|0.203|(0.070)***|-0.917|(0.287)***|0.009|(0.030)|-2.451|(0.555)***|
|Obs.|2,064||2,064||2,064||1,882||
|R-squared|0.043||||0.020||||
|F-stat|6.35||||2.91||||
|Pseudo-R2|||0.050||||0.102||
|Wald-stat|||85.74||||3,361.7||
|Z-statfor interactioneffect (mean& s|td.dev.)||2.484|(0.178)|||1.753|(0.355)|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

38
# **Table 20: DID Regression (6)**

||Car for po|pulated area|||Car for mu<br>capital|nicipal|||
|---|---|---|---|---|---|---|---|---|
||Linearpr|obability|Probit||Linearpro|bability|Probit||
|D|0.002|(0.012)|0.092|(0.142)|0.013|(0.015)|0.100|(0.128)|
|T|-0.043|(0.014) ***|-0.524|(0.198) ***|-0.024|(0.018)|-0.158|(0.140)|
|D*T|0.050|(0.017) ***|0.527|(0.227) **|0.059|(0.023) **|0.363|(0.172) **|
|lnHH size|-0.007|(0.012)|-0.123|(0.153)|0.014|(0.016)|0.100|(0.112)|
|Adult share|0.055|(0.027) **|0.645|(0.337) *|0.110|(0.034) ***|0.804|(0.234) ***|
|HH head sex: Male|-0.012|(0.012)|-0.150|(0.173)|0.004|(0.020)|0.057|(0.133)|
|HH head education: Elementary|0.025|(0.009) ***|0.348|(0.139) **|-0.002|(0.014)|-0.049|(0.098)|
|HH head education: Secondary|0.044|(0.021) **|0.533|(0.216) **|0.053|(0.031) *|0.293|(0.160) *|
|HH head education: University|0.150|(0.072) **|1.028|(0.331) ***|0.117|(0.077)|0.489|(0.287) *|
|Appliance ownership: Refrigerator|0.010|(0.011)|0.113|(0.154)|0.003|(0.016)|0.015|(0.125)|
|Appliance ownership: Color TV|0.004|(0.012)|0.044|(0.142)|0.025|(0.016)|0.185|(0.120)|
|Appliance ownership: Radio|0.019|(0.009) **|0.236|(0.119) **|0.024|(0.012) **|0.181|(0.091) **|
|Appliance ownership: Gas stove|0.016|(0.009) *|0.303|(0.174) *|0.025|(0.014) *|0.247|(0.136) *|
|Appliance ownership: Washing|||||||||
|machine|0.022|(0.015)|0.211|(0.132) *|0.042|(0.020) **|0.228|(0.104) **|
|Gas use for cooking|0.007|(0.012)|0.070|(0.122)|0.018|(0.017)|0.108|(0.100)|
|Power use for lighting|-0.009|(0.011)|-0.101|(0.143)|0.001|(0.015)|0.029|(0.124)|
|Tap water for cooking|0.026|(0.010) ***|0.305|(0.108) ***|-0.005|(0.013)|-0.051|(0.087)|
|Constant|-0.035|(0.040)|-2.852|(0.544)***|-0.094|(0.053)*|-2.789|(0.385)***|
|Obs.|2,064||2,064||2,064||2,064||
|R-squared|0.037||||0.035||||
|F-stat|2.83||||3.88||||
|Pseudo-R2|||0.100||||0.068||
|Wald-stat|||65.20||||79.30||
|Z-statfor interactioneffect (mean& s|td.dev.)||1.451|(0.230)|||1.978|(0.164)|
|Note: Standard errors are sho|wn in parenth|eses. *, **, ***|indicate th|e statistical sig|nificance a|t 10%, 5% an|d 1%, resp|ectively.|

39
||||**Table 21: D**|**ID Regressio**|**n(7)**||||
|---|---|---|---|---|---|---|---|---|
||Car for ho<br>Linear pro|spital<br>bability|Probit||Car for sch<br>Linear pro|ool<br>bability|Probit||
|D|-0.004|(0.016)|-0.023|(0.116)|-0.005|(0.008)|-0.116|(0.215)|
|T|-0.028|(0.020)|-0.174|(0.134)|-0.018|(0.010) *|-0.336|(0.238)|
|D*T|0.076|(0.025) ***|0.447|(0.163) ***|0.040|(0.013) ***|0.717|(0.302) **|
|lnHH size|0.016|(0.016)|0.107|(0.104)|0.002|(0.008)|-0.020|(0.178)|
|Adult share|0.093|(0.034) ***|0.611|(0.220) ***|0.058|(0.021) ***|1.167|(0.459) **|
|HH head sex: Male|-0.005|(0.020)|-0.002|(0.130)|0.002|(0.011)|0.092|(0.211)|
|HH head education: Elementary|-0.007|(0.014)|-0.065|(0.093)|0.012|(0.007) *|0.273|(0.173)|
|HH head education: Secondary|0.057|(0.032) *|0.286|(0.152) *|0.026|(0.017)|0.495|(0.258) *|
|HH head education: University|0.149|(0.081) *|0.596|(0.273) **|0.123|(0.065) *|1.073|(0.347) ***|
|Appliance ownership: Refrigerator|0.005|(0.018)|0.023|(0.125)|0.008|(0.008)|0.210|(0.185)|
|Appliance ownership: Color TV|0.011|(0.018)|0.074|(0.116)|-0.003|(0.008)|-0.062|(0.170)|
|Appliance ownership: Radio|0.039|(0.012) ***|0.270|(0.088) ***|0.005|(0.007)|0.107|(0.153)|
|Appliance ownership: Gas stove|0.000|(0.016)|0.003|(0.120)|0.016|(0.006) ***|0.716|(0.344) **|
|Appliance ownership: Washing|||||||||
|machine|0.038|(0.020) *|0.203|(0.103) **|0.009|(0.011)|0.137|(0.166)|
|Gas use for cooking|0.016|(0.017)|0.090|(0.098)|0.009|(0.010)|0.133|(0.149)|
|Power use for lighting|0.001|(0.017)|0.019|(0.117)|-0.007|(0.008)|-0.140|(0.182)|
|Tap water for cooking|0.007|(0.014)|0.026|(0.085)|0.008|(0.008)|0.133|(0.151)|
|Constant|-0.042|(0.053)|-2.271|(0.355)***|-0.056|(0.029)**|-4.114|(0.828)***|
|Obs.|2,064||2,064||2,064||2,064||
|R-squared|0.033||||0.035||||
|F-stat|3.12||||1.99||||
|Pseudo-R2|||0.051||||0.145||
|Wald-stat|||63.48||||45.58||
|Z-statfor interactioneffect (mean& s|td.dev.)||2.522|(0.193)|||1.496|(0.433)|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

40
|||**Table 22: DID R**|**egression (8)**||||
|---|---|---|---|---|---|---|
||Bicycle ownership<br>Linear probability|Probit|Motorcycle owners<br>Linear probability<br>|hip<br>Probit|Car ownership<br>Linear probability|Probit|
|D|-0.110 (0.031) ***|-0.290 (0.082) ***|-<br>0.001 (0.024)|-0.015 (0.098)|0.026 (0.018)|0.172 (0.121)|
|T|-0.284 (0.034) ***|-0.767 (0.095) ***|0.089 (0.030) ***|0.305 (0.103) ***|-0.037 (0.020) **|-0.211 (0.134)|
|D*T|0.070 (0.041) *|0.171 (0.119)|-<br>0.008 (0.037)|-0.002 (0.130)|0.041 (0.025) *|0.224 (0.164)|
|lnHH size|0.102 (0.027) ***|0.308 (0.080) ***|0.091 (0.023) ***|0.359 (0.088) ***|0.045 (0.018) **|0.263 (0.112) **|
|Adult share|-0.100 (0.059) *|-0.255 (0.165)|0.100 (0.049) **<br>-|0.403 (0.177) **|0.156 (0.037) ***|0.945 (0.223) ***|
|HH head sex: Male|-0.003 (0.030)|-0.025 (0.088)|0.109 (0.022) ***|-0.480 (0.113) ***|-0.025 (0.019)|-0.137 (0.137)|
|HH head education: Elementary|0.063 (0.023) ***|0.182 (0.068) ***|0.074 (0.019) ***|0.298 (0.078) ***|0.037 (0.013) ***|0.267 (0.097) ***|
|HH head education: Secondary|0.090 (0.043) **|0.267 (0.123) **|0.210 (0.041) ***|0.702 (0.126) ***|0.092 (0.031) ***|0.536 (0.154) ***|
|HH head education: University|0.089 (0.085)|0.263 (0.252)|0.219 (0.092) **|0.743 (0.261) ***|0.284 (0.085) ***|1.129 (0.249) ***|
|Appliance ownership: Refrigerator|0.007 (0.032)|0.027 (0.093)|-<br>0.038 (0.027)|-0.147 (0.099)|0.020 (0.018)|0.108 (0.127)|
|Appliance ownership: Color TV|0.023 (0.031)|0.071 (0.088)|0.045 (0.026) *|0.152 (0.094) *|0.013 (0.018)|0.084 (0.115)|
|Appliance ownership: Radio|0.072 (0.021) ***|0.208 (0.062) ***|0.027 (0.018)|0.092 (0.067)|0.022 (0.013) *|0.141 (0.085) *|
|Appliance ownership: Gas stove<br>Appliance ownership: Washing|-0.051 (0.030) *|-0.146 (0.082) *|0.079 (0.022) ***|0.355 (0.100) ***|0.008 (0.015)|0.091 (0.125)|
|machine|-0.039 (0.029)|-0.107 (0.083)|0.054 (0.028) **|0.157 (0.084) *|0.033 (0.021)|0.156 (0.100)|
|Gas use for cooking|-0.055 (0.026) **|-0.166 (0.078) **|0.014 (0.025)|0.054 (0.081)|0.031 (0.018) *|0.152 (0.095) *|
|Power use for lighting|-0.002 (0.032)|-0.012 (0.091)|0.029 (0.024)<br>-|0.128 (0.098)|0.016 (0.016)|0.116 (0.122)|
|Tap water for cooking|-0.019 (0.022)|-0.056 (0.063)|0.026 (0.019)|-0.100 (0.069)|0.019 (0.014)|0.109 (0.085)|
|Constant|0.504(0.089)***|-0.041(0.254)|-<br>0.041(0.072)|-1.806 (0.299)***|-0.153 (0.056)***|-2.954(0.382)***|
|Obs.|2,064|2,064|2,064|2,064|2,064|2,064|
|R-squared|0.128||0.076||0.050||
|F-stat|21.38||11.16||4.27||
|Pseudo-R2||0.100||0.076||0.072|
|Wald-stat||262.54||148.35||79.86|
|Z-statfor interactioneffect (mean&|std.dev.)|1.692(0.331)||-0.048 (0.014)||1.093 (0.096)|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

41
# **Table 23: DID Regression (9)**

||No. of stud<br>Total|ents|Boys||Girls||Preschool||
|---|---|---|---|---|---|---|---|---|
|D|0.104|(0.131)|0.143|(0.132)|-0.234|(0.130) *|-0.007|(0.099)|
|T|-1.201|(0.157) ***|-0.719|(0.147) ***|-0.924|(0.142) ***|-0.105|(0.104)|
|D*T|0.430|(0.190) **|0.163|(0.179)|0.588|(0.176) ***|0.154|(0.131)|
|lnHH size|1.044|(0.124) ***|0.861|(0.111) ***|0.786|(0.108) ***|0.292|(0.072) ***|
|Adult share|-3.885|(0.278) ***|-2.938|(0.245) ***|-2.837|(0.237) ***|-1.420|(0.156) ***|
|HH head sex: Male|-0.188|(0.148)|-0.281|(0.134) **|-0.058|(0.134)|0.129|(0.102)|
|HH head education: Elementary|-0.032|(0.100)|-0.012|(0.096)|-0.026|(0.094)|0.069|(0.066)|
|HH head education: Secondary|-0.655|(0.213) ***|-0.432|(0.188) **|-0.411|(0.185) **|0.230|(0.147) *|
|HH head education: University|-0.694|(0.367) *|-0.617|(0.304) **|-0.317|(0.355)|0.406|(0.330)|
|Appliance ownership: Refrigerator|-0.052|(0.146)|-0.075|(0.144)|0.014|(0.142)|-0.140|(0.113)|
|Appliance ownership: Color TV|0.113|(0.132)|-0.031|(0.131)|0.110|(0.130)|-0.006|(0.100)|
|Appliance ownership: Radio|-0.028|(0.097)|0.106|(0.091)|-0.087|(0.091)|0.003|(0.067)|
|Appliance ownership: Gas stove|0.272|(0.129) **|0.237|(0.122) **|0.042|(0.120)|0.019|(0.095)|
|Appliance ownership: Washing|||||||||
|machine|0.072|(0.135)|0.149|(0.127)|-0.009|(0.125)|0.031|(0.091)|
|Gas use for cooking|0.263|(0.123) **|0.088|(0.116)|0.151|(0.114)|0.057|(0.084)|
|Power use for lighting|0.232|(0.141) *|-0.003|(0.134)|0.264|(0.135) **|0.060|(0.103)|
|Tap water for cooking|-0.093|(0.098)|0.006|(0.094)|-0.206|(0.095) **|0.028|(0.071)|
|Constant|-0.692|(0.414)*|-1.705|(0.371)***|-1.808|(0.360)***|-3.639|(0.245)***|
|Obs.|2,064||2,064||2,064||2,064||
|R-squared|0.391||0.298||0.278||0.114||
|F-stat|116.01||66.91||58.63||15.05||

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

42
# **Table 24: DID Regression (10)**

||No. of stud<br>Elementar|ents<br>y|Secondary||University||No. of sick|HH members|
|---|---|---|---|---|---|---|---|---|
|D|-0.007|(0.132)|-0.194|(0.092) **|-0.004|(0.032)|0.085|(0.140)|
|T|-0.161|(0.140)|-0.009|(0.117)|-0.009|(0.043)|-0.808|(0.143) ***|
|D*T|0.143|(0.175)|0.237|(0.137) *|0.001|(0.049)|0.076|(0.178)|
|lnHH size|1.151|(0.118) ***|0.455|(0.087) ***|0.119|(0.040) ***|0.547|(0.116) ***|
|Adult share|-4.475|(0.257) ***|-0.471|(0.181) ***|0.193|(0.096) **|0.274|(0.252)|
|HH head sex: Male|-0.294|(0.140) **|-0.143|(0.086) *|0.103|(0.050) **|0.107|(0.140)|
|HH head education: Elementary|-0.127|(0.094)|-0.095|(0.072)|0.031|(0.021)|-0.200|(0.104) **|
|HH head education: Secondary|-0.857|(0.188) ***|0.271|(0.169) *|0.076|(0.062)|-0.352|(0.175) **|
|HH head education: University|-0.523|(0.340)|-0.206|(0.248)|0.617|(0.316) *|-1.006|(0.214) ***|
|Appliance ownership: Refrigerator|0.033|(0.139)|0.155|(0.102)|0.023|(0.030)|-0.227|(0.149)|
|Appliance ownership: Color TV|0.253|(0.126) **|0.162|(0.099) *|0.006|(0.043)|-0.100|(0.138)|
|Appliance ownership: Radio|0.043|(0.091)|-0.030|(0.067)|0.035|(0.023)|0.035|(0.093)|
|Appliance ownership: Gas stove|-0.079|(0.124)|0.144|(0.073) **|0.001|(0.017)|0.201|(0.127)|
|Appliance ownership: Washing|||||||||
|machine|-0.023|(0.122)|0.102|(0.107)|0.059|(0.048)|0.171|(0.127)|
|Gas use for cooking|0.036|(0.114)|0.096|(0.092)|0.080|(0.039) **|0.026|(0.114)|
|Power use for lighting|0.014|(0.138)|-0.114|(0.098)|-0.004|(0.035)|0.416|(0.137) ***|
|Tap water for cooking|0.221|(0.093) **|-0.104|(0.070)|-0.011|(0.026)|-0.084|(0.097)|
|Constant|-0.416|(0.401)|-4.251|(0.267)***|-5.016|(0.144)***|-4.181|(0.381)***|
|Obs.|2,064||2,064||2,064||2,064||
|R-squared|0.445||0.082||0.038||0.065||
|F-stat|165.58||10.48||1.44||9.84||

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

43
# **Table 25: DID Regression (11)**

||No. of HH|members engage|d|||||HH Monthly<br>income|
|---|---|---|---|---|---|---|---|---|
||Agricultur|e|Industry|Commerce|Service||Public sector||
|D|-0.201|(0.117) *|0.001 (0.012)|-0.014 (0.036)|0.037|(0.026)|0.221 (0.089) **<br>-|-<br>0.018 (0.091)|
|T|-1.563|(0.157)|-0.022 (0.013) *|-0.076 (0.051)|0.018|(0.027)|0.355 (0.092) ***|0.246 (0.075) ***|
|D*T|0.304|(0.191)|0.023 (0.017)|0.067 (0.055)|-0.010|(0.041)|0.114 (0.119)|0.170 (0.101) *|
|lnHH size|0.923|(0.126) ***|-0.008 (0.017)|0.026 (0.035)|0.052|(0.034)|0.217 (0.071) ***|0.352 (0.062) ***|
|Adult share|1.148|(0.264) ***|0.014 (0.030)|0.015 (0.066)|0.016|(0.060)|0.044 (0.164)|1.372 (0.130) ***<br>|
|HH head sex: Male|-0.925|(0.158) ***|0.007 (0.013)|-0.048 (0.028) *|0.023|(0.037)|0.074 (0.094)|-<br>0.038 (0.074)|
|HH head education:||||||||-|
|Elementary|0.097|(0.107)|0.012 (0.007) *|0.052 (0.021) **|0.027|(0.017) *|0.228 (0.056) ***|<br>0.050 (0.056)|
|HH head education: Secondary|<br>-0.614|(0.211) ***|-0.006 (0.006)|0.265 (0.096) ***|<br>0.053|(0.051)|1.083 (0.179) ***|0.188 (0.098) **|
|HH head education: University|-1.066|(0.349) ***|0.154 (0.156)|-0.075 (0.034) **|-0.041|(0.025) *|2.098 (0.457) ***|0.979 (0.142) ***|
|Appliance ownership:|||||||||
|Refrigerator<br>Appliance ownership: Color|-0.097|(0.155)|-0.017 (0.019)|0.067 (0.037) *|0.037|(0.032)|0.119 (0.104)|0.096 (0.083)<br>-|
|<br>TV|-0.042|(0.144)|0.019 (0.011) *|-0.002 (0.038)|-0.050|(0.040)|0.077 (0.096)<br>|0.005 (0.075)|
|Appliance ownership: Radio<br>Appliance ownership: Gas|-0.114|(0.098)|0.015 (0.007) **|-0.012 (0.029)|-0.013|(0.022)|-<br>0.078 (0.066)|0.022 (0.050)|
|stove|-0.035|(0.124)|0.002 (0.003)|-0.015 (0.023)|0.028|(0.012) **|0.154 (0.075) **|0.136 (0.089)|
|Appliance ownership:|||||||||
|Washing machine|-0.223|(0.143)|-0.006 (0.015)|0.088 (0.056)|0.003|(0.035)|0.164 (0.097) *|0.176 (0.055) ***|
|Gas use for cooking|-0.411|(0.132) ***|0.021 (0.016)|0.138 (0.051) ***|<br>0.043|(0.031)|0.312 (0.093) ***<br>-|0.365 (0.049) ***<br>-|
|Power use for lighting|-0.167|(0.145)|0.010 (0.010)|-0.003 (0.030)|0.065|(0.024) ***|<br>0.115 (0.098)|0.005 (0.078)|
|Tap water for cooking|0.024|(0.103)|0.006 (0.010)|0.020 (0.030)|-0.028|(0.025)|-<br>0.003 (0.067)|0.071 (0.048)|
|Constant|-1.215|(0.408)***|-4.635 (0.049)***|-4.609 (0.100)***|<br>-4.758|(0.101)***|<br>-<br>4.930 (0.253)***|3.906 (0.209)***|
|Obs.|2,064||2,064|2,064|2,064||2,058|1,797|
|R-squared|0.201||0.017|0.036|0.014||0.097|0.227|
|F-stat|36.72||0.24|1.87|1.19||8.42|29.16|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

44
**<u>Table 26: IV Estimation (1)</u>**

||Distance t|o:|||||||
|---|---|---|---|---|---|---|---|---|
||Populated|area|Municipal|capital|Hospital||School||
|D|-2.414|(1.004) **|-0.536|(0.628)|-0.631|(0.671)|2.550|(0.727) ***|
|lnHH size|-0.334|(0.313)|0.361|(0.196) *|0.286|(0.209)|-0.141|(0.227)|
|Adult share|0.072|(0.657)|0.270|(0.411)|0.220|(0.439)|0.069|(0.475)|
|HH head sex: Male|-0.605|(0.378) *|-0.655|(0.236) ***|-0.680|(0.252) ***|-0.484|(0.274) *|
|HH head education: Elementary|0.035|(0.271)|0.103|(0.169)|-0.171|(0.181)|-0.117|(0.196)|
|HH head education: Secondary|-0.483|(0.442)|0.194|(0.276)|0.153|(0.295)|-0.278|(0.320)|
|HH head education: University|-0.927|(0.894)|0.552|(0.559)|0.086|(0.598)|-0.823|(0.647)|
|Appliance ownership: Refrigerator|-0.195|(0.410)|-0.288|(0.256)|-0.299|(0.274)|0.097|(0.296)|
|Appliance ownership: Color TV|0.129|(0.407)|0.473|(0.254) *|0.038|(0.272)|0.133|(0.294)|
|Appliance ownership: Radio|0.096|(0.252)|-0.194|(0.158)|-0.232|(0.168)|-0.106|(0.182)|
|Appliance ownership: Gas stove|0.520|(0.423)|0.334|(0.265)|0.133|(0.283)|0.637|(0.306) **|
|Appliance ownership: Washing<br>machine|-0.580|(0.295) **|-0.410|(0.184) **|-0.470|(0.197) **|-0.187|(0.214)|
|Gas use for cooking|-0.601|(0.285) **|-0.127|(0.178)|-0.458|(0.190) **|0.082|(0.206)|
|Power use for lighting|-0.878|(0.432) **|-0.330|(0.270)|-0.316|(0.289)|-0.495|(0.313)|
|Tap water for cooking|0.666|(0.274) **|0.074|(0.171)|0.193|(0.183)|-0.237|(0.198)|
|Constant|2.228|(1.499)|2.834|(0.937)***|3.685|(1.002)***|-1.159|(1.085)|
|Obs.|911||911||911||911||
|R-squared|||0.016||0.017||||
|Wald-stat|2.90||2.14||2.49||3.75||
|Sargan overidentifying restriction test|0.75||0.05||2.03||0.93||
|Hausmanexogeneity test|21.79*|**|23.78*|**|10.40*|**|45.83|***|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

45
||Travel tim<br>Populated|e to:<br>area|**Table 27:**<br>Municipal|**IV Estimatio **<br>capital|**n(2)**<br>Hospital||School||
|---|---|---|---|---|---|---|---|---|
|D|0.274|(0.417)|-0.146|(0.242)|-0.438|(0.281)|1.007|(0.297) ***|
|lnHH size|0.058|(0.106)|0.096|(0.076)|0.075|(0.089)|-0.044|(0.103)|
|Adult share|-0.045|(0.229)|-0.051|(0.159)|-0.084|(0.185)|0.029|(0.216)|
|HH head sex: Male|0.041|(0.141)|-0.062|(0.096)|-0.098|(0.110)|-0.015|(0.132)|
|HH head education: Elementary|0.146|(0.090) *|0.080|(0.065)|-0.002|(0.076)|-0.105|(0.088)|
|HH head education: Secondary|-0.113|(0.162)|-0.045|(0.106)|-0.100|(0.123)|-0.354|(0.143) **|
|HH head education: University|-0.373|(0.331)|0.070|(0.214)|-0.265|(0.248)|-0.834|(0.287) ***|
|Appliance ownership: Refrigerator|-0.255|(0.149) *|-0.138|(0.101)|-0.019|(0.114)|-0.146|(0.137)|
|Appliance ownership: Color TV|-0.335|(0.159) **|-0.291|(0.100) ***|-0.408|(0.114) ***|-0.287|(0.137) **|
|Appliance ownership: Radio|0.173|(0.086) **|-0.172|(0.061) ***|-0.086|(0.070)|0.030|(0.082)|
|Appliance ownership: Gas stove|0.044|(0.151)|-0.011|(0.105)|-0.101|(0.119)|0.028|(0.144)|
|Appliance ownership: Washing|||||||||
|machine|0.018|(0.109)|-0.144|(0.072) **|-0.096|(0.084)|-0.051|(0.097)|
|Gas use for cooking|-0.177|(0.111) *|-0.096|(0.069)|-0.031|(0.082)|0.041|(0.093)|
|Power use for lighting|-0.294|(0.171) *|-0.251|(0.108) **|-0.299|(0.121) **|-0.155|(0.142)|
|Tap water for cooking|0.072|(0.091)|-0.140|(0.065) **|-0.170|(0.076) **|-0.323|(0.087) ***|
|Constant|3.543|(0.607)***|4.644|(0.367)***|4.940|(0.428)***|2.623|(0.478)***|
|Obs.|551||841||833||816||
|R-squared|0.169||0.096||||0.118||
|Wald-stat|5.88||8.07||5.07||9.77||
|Sargan overidentifying restriction test|0.56||0.72||1.65||2.98 *||
|Hausmanexogeneity test|12.76*|**|15.60|***|16.95*|**|56.32 *|**|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

46
**Table 28: IV Estimation (3)**

||No. of trips to:<br>|||||||
|---|---|---|---|---|---|---|---|
||Buy food|Buy goods|Go to|work|Do business<br>|Visit friend|s/relatives|
|D|-1.239 (0.472) ***|0.105 (0.167)|0.785|(0.602)|-<br>0.295 (0.469)|-0.156|(0.383)|
|lnHH size|0.238 (0.147) *|0.068 (0.052)|0.129<br>-|(0.188)|0.184 (0.146)|-0.112|(0.119)|
|Adult share|0.243 (0.309)|0.147 (0.110)|0.492<br>-|(0.394)|0.265 (0.307)<br>-|-0.214|(0.250)|
|HH head sex: Male|0.060 (0.178)|0.038 (0.063)|0.378|(0.226) *|0.198 (0.177)|-0.074|(0.144)|
|HH head education: Elementary|-0.107 (0.127)|0.065 (0.045)|0.215|(0.162)|0.241 (0.126) *|0.123|(0.103)|
|HH head education: Secondary|0.038 (0.208)|0.063 (0.074)|0.920|(0.265) ***|0.591 (0.206) ***|0.179|(0.168)|
|HH head education: University|0.112 (0.421)|-0.022 (0.149)|0.771<br>-|(0.536)|0.265 (0.418)|0.331|(0.341)|
|Appliance ownership: Refrigerator|0.252 (0.193)|0.043 (0.068)|0.069|(0.245)|0.101 (0.191)|0.015|(0.156)|
|Appliance ownership: Color TV|-0.312 (0.191) *|0.055 (0.068)|0.478|(0.244) **|0.110 (0.190)<br>-|-0.223|(0.155)|
|Appliance ownership: Radio|-0.320 (0.119) ***|0.028 (0.042)|0.125|(0.151)|0.143 (0.118)|-0.123|(0.096)|
|Appliance ownership: Gas stove<br>Appliance ownership: Washing|-0.394 (0.199) **|-0.061 (0.071)|0.208|(0.254)|0.211 (0.198)<br>-|0.026|(0.161)|
|machine|-0.024 (0.139)|-0.009 (0.049)|0.107|(0.177)|0.267 (0.138) **<br>-|0.063|(0.113)|
|Gas use for cooking|0.028 (0.134)|0.025 (0.048)|0.136|(0.171)|0.002 (0.133)<br>-|-0.119|(0.109)|
|Power use for lighting|0.345 (0.203) *|0.010 (0.072)|0.089|(0.259)|0.139 (0.202)|0.075|(0.165)|
|Tap water for cooking|-0.112 (0.129)|0.022 (0.046)|0.167|(0.164)|0.242 (0.128) *|0.080|(0.104)|
|Constant|3.346 (0.706) ***|4.926 (0.250) ***|4.551|(0.898) ***|4.394 (0.701) ***|3.733|().572) ***|
|Obs.|911|911|911||911|911||
|R-squared||0.003|0.026||0.028|0.005||
|Wald-stat|2.26|0.54|3.12||1.94|0.65||
|Sargan overidentifying restriction test|<br>1.87|0.25|4.60|**|0.13|2.51 *||
|Hausmanexogeneity test|8.56***|10.16***|28.99|***|5.35**|45.70*|**|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

47
# **Table 29: IV Estimation (4)**

||||Bus for mu<br>|nicipal|||
|---|---|---|---|---|---|---|
||Bus for popul<br>IVProbit|ated area<br>|capital<br>IVProbit||Bus for hos<br>IVProbit|pital|
|D|1.015|(0.712)|1.298|(0.493) ***|1.675|(0.521) ***|
|lnHH size|-0.235|(0.195)|-0.008|(0.144)|0.034|(0.147)|
|Adult share|-0.659|(0.419)|-0.430|(0.302)|-0.252|(0.308)|
|HH head sex: Male|0.064|(0.245)|0.252|(0.165)|0.233|(0.175)|
|HH head education: Elementary|-0.066|(0.163)|-0.193|(0.120) *|-0.143|(0.124)|
|HH head education: Secondary|-0.437|(0.323)|-0.406|(0.211) *|-0.325|(0.218)|
|HH head education: University|||-0.311|(0.430)|-0.602|(0.542)|
|Appliance ownership: Refrigerator|-0.228|(0.236)|-0.073|(0.177)|-0.044|(0.184)|
|Appliance ownership: Color TV|-0.059|(0.251)|0.032|(0.179)|-0.045|(0.183)|
|Appliance ownership: Radio|0.146|(0.159)|-0.165|(0.113)|-0.120|(0.117)|
|Appliance ownership: Gas stove|0.084|(0.228)|-0.016|(0.172)|0.055|(0.179)|
|Appliance ownership: Washing machine|-0.293|(0.222)|-0.201|(0.144)|-0.237|(0.148) *|
|Gas use for cooking|0.204|(0.190)|0.028|(0.136)|0.035|(0.141)|
|Power use for lighting|-0.390|(0.239) *|<br>-0.296|(0.182) *|-0.022|(0.192)|
|Tap water for cooking|-0.017|(0.178)|-0.061|(0.125)|-0.169|(0.127)|
|Constant|-1.189|(0.987)|-1.146|(0.694)*|-1.781|(0.731)**|
|Obs.|911||911||911||
|Wald-stat|37.69||59.34||57.71||
|Amemiya-Lee-Newey overidentifying restriction|||||||
|test|1.39||9.36|***|14.89|***|
|Hausmanexogeneity test|4.81 *|*|12.22|***|9.77|***|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

48
**Table** **<u>30: IV Estimation (5)</u>**

||Car for pop<br>IVProbit|ulated area|Car for mun<br>capital<br>IVProbit|icipal|Car for hos<br>IVProbit|pital|Car for sch<br>IVProbit|ool|
|---|---|---|---|---|---|---|---|---|
|D|1.365|(0.796) *|0.170|(0.530)|-0.427|(0.518)|1.707|(0.928) *|
|lnHH size|-0.016|(0.219)|0.124|(0.164)|0.094|(0.164)|0.145|(0.245)|
|Adult share|0.599|(0.457)|0.929|(0.344) ***|0.570|(0.342) *|1.543|(0.561) ***|
|HH head sex: Male|||-0.136|(0.206)|-0.071|(0.198)|0.120|(0.299)|
|HH head education: Elementary|0.414|(0.206) **|0.138|(0.148)|0.068|(0.143)|0.132|(0.229)|
|HH head education: Secondary|0.473|(0.299)|0.440|(0.215) **|0.426|(0.213) **|0.196|(0.352)|
|HH head education: University|0.893|(0.474) *|0.409|(0.419)|0.349|(0.423)|1.034|(0.491) **|
|Appliance ownership: Refrigerator|0.275|(0.341)|0.124|(0.237)|-0.018|(0.218)|0.482|(0.393)|
|Appliance ownership: Color TV|-0.240|(0.282)|0.025|(0.217)|-0.111|(0.211)|-0.003|(0.328)|
|Appliance ownership: Radio|0.344|(0.185) *|0.153|(0.135)|0.214|(0.134)|0.058|(0.207)|
|Appliance ownership: Gas stove|0.719|(0.439) *|0.127|(0.256)|-0.058|(0.231)|||
|Appliance ownership: Washing machine|-0.025|(0.191)|0.307|(0.141) **|0.252|(0.143) *|0.073|(0.225)|
|Gas use for cooking|0.164|(0.183)|0.172|(0.141)|0.049|(0.141)|0.205|(0.227)|
|Power use for lighting|0.061|(0.327)|0.303|(0.261)|0.205|(0.243)|0.142|(0.386)|
|Tap water for cooking|0.521|(0.201) ***|0.031|(0.143)|0.104|(0.141)|0.338|(0.233)|
|Constant|-4.742|(1.061)***|-3.046|(0.818)***|-1.910|(0.777)**|-5.486|(1.334)***|
|Obs.|921||911||911||911||
|Wald-stat|22.77||32.23||19.91||18.40||
|Amemiya-Lee-Newey overidentifying restriction|||||||||
|test|3.30|*|0.97||0.18||1.06||
|Hausmanexogeneity test|11.56|***|19.33|***|12.90|***|8.55|***|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

49
|||**Table 31: I**|**V Estimatio**|**n(6)**|||
|---|---|---|---|---|---|---|
||Bicycle ow<br>IV Probit|nership<br>|Motorcycle<br>IV Probit|ownership<br>|Car owners<br>IV Probit|hip<br>|
|D|0.366|(0.399)|0.508|(0.398)|-0.168|(0.525)|
|lnHH size|0.410|(0.127) ***|0.397|(0.129) ***|0.369|(0.156) **|
|Adult share|0.051|(0.256)|0.405|(0.263)|1.421|(0.340) ***|
|HH head sex: Male|-0.181|(0.160)|-0.514|(0.172) ***|-0.457|(0.229) **|
|HH head education: Elementary|0.004|(0.108)|0.420|(0.113) ***|0.106|(0.143)|
|HH head education: Secondary|0.023|(0.175)|0.964|(0.172) ***|0.373|(0.216) *|
|HH head education: University|0.077|(0.360)|0.917|(0.332) ***|0.896|(0.388) **|
|Appliance ownership: Refrigerator|0.313|(0.172) *|-0.203|(0.166)|0.013|(0.224)|
|Appliance ownership: Color TV|0.007|(0.163)|0.157|(0.167)|0.134|(0.220)|
|Appliance ownership: Radio|0.212|(0.101) **|0.079|(0.101)|0.210|(0.134) *|
|Appliance ownership: Gas stove|-0.177|(0.165)|0.427|(0.182) **|-0.340|(0.219)|
|Appliance ownership: Washing machine|-0.096|(0.116)|-0.026|(0.114)|0.164|(0.144)|
|Gas use for cooking|-0.102|(0.115)|0.054|(0.112)|0.264|(0.141) *|
|Power use for lighting|-0.231|(0.171)|0.480|(0.184) ***|0.016|(0.239)|
|Tap water for cooking|-0.148|(0.107)|-0.036|(0.108)|0.048|(0.143)|
|Constant|-1.063|(0.601)*|-2.219|(0.617)***|-2.411|(0.788)***|
|Obs.|911||911||911||
|Wald-stat|42.05||76.06||41.37||
|Amemiya-Lee-Newey overidentifying restriction|||||||
|test|0.62||0.85||0.98||
|Hausmanexogeneity test|14.94|***|7.10|***|13.85|***|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

50
||No. of stud|ents|**Table 32:**|**IV Estimation **|**(7)**||||
|---|---|---|---|---|---|---|---|---|
||Total||Boys||Girls||Preschool||
|D|1.003|(0.608) *|0.739|(0.533)|0.878|(0.535) *|-1.191|(0.437) ***|
|lnHH size|0.860|(0.190) ***|0.584|(0.166) ***|0.649|(0.167) ***|0.040|(0.136)|
|Adult share|-3.082|(0.398) ***|-2.593|(0.348) ***|-2.161|(0.350) ***|-1.829|(0.286) ***|
|HH head sex: Male|0.016|(0.229)|-0.042|(0.200)|0.169|(0.201)|0.056|(0.164)|
|HH head education: Elementary|0.018|(0.164)|0.099|(0.144)|-0.074|(0.144)|0.010|(0.118)|
|HH head education: Secondary|-0.587|(0.268) **|-0.393|(0.234) *|-0.405|(0.235) *|0.313|(0.192) *|
|HH head education: University|-0.466|(0.542)|-0.422|(0.474)|-0.429|(0.477)|0.215|(0.389)|
|Appliance ownership: Refrigerator|-0.245|(0.248)|-0.369|(0.217) *|-0.107|(0.218)|-0.124|(0.178)|
|Appliance ownership: Color TV|0.309|(0.247)|0.083|(0.216)|0.428|(0.217) **|-0.305|(0.177) *|
|Appliance ownership: Radio|-0.409|(0.153) ***|-0.149|(0.134)|-0.265|(0.134) **|-0.171|(0.110)|
|Appliance ownership: Gas stove|-0.149|(0.257)|-0.009|(0.225)|-0.240|(0.226)|0.030|(0.184)|
|Appliance ownership: Washing|||||||||
|machine|0.228|(0.179)|0.318|(0.157) **|-0.042|(0.157)|0.232|(0.128) *|
|Gas use for cooking|0.499|(0.173) ***|0.246|(0.151) *|0.275|(0.152) *|-0.053|(0.124)|
|Power use for lighting|0.551|(0.262) **|0.440|(0.229) *|0.458|(0.230) **|-0.054|(0.188)|
|Tap water for cooking|-0.136|(0.166)|0.021|(0.145)|-0.305|(0.146) **|-0.007|(0.119)|
|Constant|-2.566|(0.909)***|-2.932|(0.795)***|-3.513|(0.799)***|-1.846|(0.652)***|
|Obs.|911||911||911||911||
|R-squared|0.259||0.213||0.184||||
|Wald stat|21.30||16.93||14.69||7.71||
|Sargan overidentifying restriction test|0.24||0.29||0.22||0.01||
|Hausmanexogeneity test|14.57*|**|16.58*|**|11.52 *|**|22.74 *|**|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

51
||No. of stud<br>Elementar|ents<br>y|**Table 33: I**<br>Secondary|**V Estimation **|**(8)**<br>University||No. of sick|HH members|
|---|---|---|---|---|---|---|---|---|
|D|-0.261|(0.519)|0.334|(0.458)|-0.007|(0.165)|-0.613|(0.500)|
|lnHH size|1.206|(0.162) ***|0.441|(0.143) ***|0.133|(0.052) ***|0.279|(0.156) *|
|Adult share|-4.644|(0.340) ***|-0.869|(0.300) ***|0.210|(0.108) *|0.086|(0.327)|
|HH head sex: Male|-0.017|(0.195)|-0.157|(0.172)|0.214|(0.062) ***|0.230|(0.188)|
|HH head education: Elementary|-0.022|(0.140)|-0.082|(0.123)|0.035|(0.045)|-0.255|(0.135) *|
|HH head education: Secondary|-0.698|(0.228) ***|0.106|(0.201)|0.101|(0.073)|-0.131|(0.220)|
|HH head education: University|-0.257|(0.463)|-0.086|(0.408)|0.480|(0.147) ***|-0.712|(0.445) *|
|Appliance ownership: Refrigerator|0.016|(0.212)|0.133|(0.187)|0.053|(0.067)|-0.030|(0.204)|
|Appliance ownership: Color TV|0.190|(0.210)|0.298|(0.186) *|0.025|(0.067)|-0.313|(0.202)|
|Appliance ownership: Radio|0.029|(0.130)|-0.205|(0.115) *|0.015|(0.041)|-0.137|(0.125)|
|Appliance ownership: Gas stove|-0.596|(0.219) ***|0.275|(0.193)|0.010|(0.070)|0.147|(0.211)|
|Appliance ownership: Washing|||||||||
|machine|0.069|(0.153)|0.138|(0.135)|-0.029|(0.049)|0.321|(0.147) **|
|Gas use for cooking|0.145|(0.147)|-0.084|(0.130)|0.079|(0.047) *|-0.147|(0.142)|
|Power use for lighting|-0.110|(0.223)|-0.133|(0.197)|-0.034|(0.071)|0.395|(0.215) *|
|Tap water for cooking|0.209|(0.142)|-0.134|(0.125)|-0.006|(0.045)|-0.128|(0.136)|
|Constant|-0.124|(0.775)|-4.108|(0.684)***|-5.167|(0.247)***|-4.027|(0.746)***|
|Obs.|911||911||911||911||
|R-squared|0.497||0.090||0.040||||
|Wald stat|59.54||6.40||2.50||1.81||
|Sargan overidentifying restriction test|0.75||3.23 *||2.61||1.26||
|Hausmanexogeneity test|21.17*|**|8.13*|**|9.20*|**|15.96*|**|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

52
|||**Table 34: IV Est**|**imation (9)**|||||
|---|---|---|---|---|---|---|---|
||No. of HH members e<br>Agriculture|ngaged:<br>Industry|Commerce|Service||Public sector|HH Monthly income|
|D|0.098 (0.671)|0.057 (0.062)|0.109 (0.185)|0.321|(0.151) **|0.950 (0.371) ***|0.290 (0.223)|
|lnHH size|0.765 (0.209) ***|-0.002 (0.019)|0.022 (0.058)|0.059|(0.047)|0.276 (0.116) **|0.395 (0.068) ***|
|Adult share|1.145 (0.439) ***|0.046 (0.040)|-0.032 (0.121)|0.029|(0.099)|0.316 (0.242)|1.323 (0.142) ***|
|HH head sex: Male|-0.530 (0.252) **|-0.007 (0.023)|0.005 (0.070)|0.065|(0.057)|-0.049 (0.139)|0.005 (0.080)|
|HH head education: Elementary|0.168 (0.181)|0.021 (0.017)|0.068 (0.050)|0.027|(0.041)|0.224 (0.100) **|0.026 (0.058)|
|HH head education: Secondary|-0.484 (0.295) *|0.000 (0.027)|0.288 (0.081) ***|0.021|(0.066)|0.619 (0.163) ***|0.074 (0.096)|
|HH head education: University|-1.344 (0.598) **|0.002 (0.055)|-0.075 (0.165)|-0.077|(0.134)|2.583 (0.330) ***|0.907 (0.187) ***|
|Appliance ownership: Refrigerator|0.149 (0.274)|0.001 (0.025)|-0.036 (0.075)|0.049|(0.062)|0.083 (0.151)|-0.012 (0.089)|
|Appliance ownership: Color TV|0.145 (0.272)|0.017 (0.025)|0.053 (0.075)|0.020|(0.061)|0.138 (0.150)|0.046 (0.090)|
|Appliance ownership: Radio|-0.192 (0.168)|0.015 (0.016)|0.000 (0.046)|-0.026|(0.038)|-0.272 (0.093) ***|0.048 (0.054)|
|Appliance ownership: Gas stove|0.295 (0.283)|0.007 (0.026)|0.019 (0.078)|0.057|(0.064)|0.258 (0.156) *|0.018 (0.095)|
|Appliance ownership: Washing||||||||
|machine|-0.088 (0.197)|0.001 (0.018)|0.008 (0.054)|0.000|(0.044)|0.123 (0.109)|0.153 (0.063) **|
|Gas use for cooking|-0.216 (0.190)|0.007 (0.018)|0.128 (0.052) **|0.112|(0.043) ***|0.283 (0.105) ***|0.285 (0.061) ***|
|Power use for lighting|-0.561 (0.289) **|0.007 (0.027)|0.049 (0.080)|0.084|(0.065)|0.134 (0.159)|-0.099 (0.093)|
|Tap water for cooking|0.053 (0.183)|0.022 (0.017)|0.027 (0.050)|-0.008|(0.041)|0.142 (0.101)|0.118 (0.059) **|
|Constant|-3.426 (1.002)***|-4.714(0.092)***|-4.780 (0.276)***|-5.106|(0.225)***|-6.021(0.553)***|4.180 (0.331)***|
|Obs.|911|911|911|911||911|859|
|R-squared|0.051|0.006|0.032|||0.081|0.159|
|F-stat|3.15|0.59|1.94|1.19||8.00|11.02|
|Sargan overidentifying restriction test|0.54|1.06|0.06|1.00||0.23|0.35|
|Hausmanexogeneity test|23.07***|1.07|15.32 ***|8.51|***|28.80***|13.83***|

Note: Standard errors are shown in parentheses. *, **, *** indicate the statistical significance at 10%, 5% and 1%, respectively.

53