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Spatial Autocorrelation Panel Regression: Agricultural Production and Transport Connectivity

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Abstract

Transport infrastructure is an important determinant of agricultural productivity. Using various new spatial data, the paper measures different types of transport accessibility and estimates their impacts in Ethiopia. The paper takes advantage of a historical event that Ethiopia, a landlocked country, ceased freight rail operations connecting its capital and the main seaport in the late 2000s. Using the substantial changes in transport accessibility, the spatial autocorrelation panel regression is applied to show that the proximity to close markets and the access to the port are of particular importance for agricultural production. The elasticity is estimated at about −0.05 to −0.13, depending on type of accessibility. It is also found that there are considerable spillover effects that come from the spatial autocorrelation errors, meaning that crop production at one place is affected by its neighborhood environment, possibly including land fertility and weather conditions.

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Notes

  1. See You and Wood (2006), You et al. (2009), and You et al. (2014) for further details.

  2. Addis Ababa, Adama, Gondar, Mekele, Hawassa, Bahir Dar, and Dire Dawa.

  3. For this MAI calculation, 64 cities and towns that have more than 1000 population are considered.

  4. To estimate this, we applied a STATA command spxtregress.

  5. In theory, with free market entry, the market prices should converge on transport costs, i.e., VOCs. In practice, however, these may not be the same because of the poor quality of the road network and the lack of competition in the trucking industry. Our companion paper, Iimi et al. (2017), uses an alternative transport cost variable, which is based on adjusted VOCs with a 60% markup taken into account. The results indicate that VOCs are a good proxy of market transport prices.

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Authors and Affiliations

  1. Transport Global Practice, World Bank Group, Washington, DC, USA

    Atsushi Iimi

  2. International Food Policy Research Institute (IFPRI), Washington, DC, USA

    Liangzhi You & Ulrike Wood-Sichra

Authors
  1. Atsushi Iimi
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  2. Liangzhi You
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  3. Ulrike Wood-Sichra
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Correspondence to Atsushi Iimi.

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Iimi, A., You, L. & Wood-Sichra, U. Spatial Autocorrelation Panel Regression: Agricultural Production and Transport Connectivity. Netw Spat Econ 20, 529–547 (2020). https://doi.org/10.1007/s11067-019-09489-y

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