In this paper, we quantify market access in rural Tanzania, and the extent to which it constrains agricultural productivity. We collect granular data on farmer input and sales decisions, input and output prices, and travel costs in all 1,183 villages in two regions of Tanzania. We find that a village in the 90th percentile of the travel-cost adjusted price distribution faces input and output prices 40-55% less favorable than a village at the 10th percentile. In reduced form, an additional standard deviation of travel time is associated with 20-25% lower input adoption and output sales. We develop and quantify a spatial model of input adoption and conservatively estimate that farmers behave as if they face travel costs of 6% ad-valorem per kilometer of travel, which is equivalent to 40% when traveling to the closest retailer. Holding exogenous local factors fixed, we estimate that reducing travel costs by 50% (approximately the effect of paving rural roads) doubles adoption and reduces the adoption-remoteness gradient by 18%.
We collect data on prices, travel costs and farmer decisions to quantify market access for chemical fertilizer and its impact on agricultural productivity in 1,180 villages in Northern Tanzania. Villages at the bottom of the travel cost-adjusted input price distribution face 40-55% less favorable prices than those at the top. A standard deviation increase in village-level remoteness is associated with 20-25% lower input adoption. A spatial model of input adoption conservatively estimates that total trade costs are 4X pecuniary travel costs. Counterfactuals suggest that halving travel costs would more than double adoption and reduce the adoption-remoteness gradient by 63%.
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