eprintid: 34166
rev_number: 16
eprint_status: archive
userid: 3114
dir: disk0/00/03/41/66
datestamp: 2023-12-13 14:40:51
lastmod: 2024-01-04 10:19:38
status_changed: 2023-12-13 14:40:51
type: workingPaper
metadata_visibility: show
creators_name: Bell, Clive
title: Rural Roads and National Welfare: Are 'Local' Methods of Evaluation Satisfactory?
subjects: ddc-330
divisions: i-181000
keywords: Rural roads, cost-benefit methods, general equilibrium, small open economy
abstract: Do ‘local’ methods of evaluation, such as partial equilibrium analysis at market prices or estimation of shadow prices, provide reliable assessments of a large rural roads programme’s social profitability? Consider a small open economy with one city and a rural hinterland, two traded goods, two non-tradables, two specific factors and mobile labour. The wage in some urban employment is regulated. Revenue is raised by a tariff or an excise on the imported good. Theory and model calibration with numerical examples establish that local methods perform rather dismally. With the equivalent variation yielded by general equilibrium analysis as benchmark, the first-order partial equilibrium method grossly underestimates a programme’s net benefit. Shadow prices derived on the assumption that all economic activity takes place at the border – a wholesale neglect of space – yield absurd underestimates. Two spatially sensitive variants of shadow pricing fall well short of remedying them.
date: 2023
id_scheme: DOI
id_number: 10.11588/heidok.00034166
schriftenreihe_cluster_id: sr-3
schriftenreihe_order: 0740
ppn_swb: 187628420X
own_urn: urn:nbn:de:bsz:16-heidok-341665
language: eng
bibsort: BELLCLIVERURALROADS20231211
full_text_status: public
series: AWI Discussion Paper Series
volume: 0740
place_of_pub: Heidelberg
pages: 37
citation:   Bell, Clive  (2023) Rural Roads and National Welfare: Are 'Local' Methods of Evaluation Satisfactory?  [Working paper]     
document_url: https://archiv.ub.uni-heidelberg.de/volltextserver/34166/7/Bell_Rural_Roads_dp740_2023.pdf