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Transport

Can commuting costs increase welfare? Israeli checkpoints and the ‘Thailandiyas’: Guest post by Alexei Abrahams

This is the third in our series of posts by students on the job market this year.
Puzzling Results:
Economists tend to believe that travel and trade costs reduce welfare. Trade papers like Irwin (2005), Redding & Sturm (2008), Storeygard (2014), and Etkes & Zimring (2014) draw on evidence from the United States, West Germany, sub-Saharan Africa, and the Gaza Strip to support this idea. One might reasonably expect, therefore, that the welfare of Palestinian commuters declined during the Second Palestinian Uprising (2000-2007), when the Israeli army deployed hundreds of roadblocks and checkpoints along the West Bank’s internal road network in order to defend Israeli civilian settlements. Although these obstacles were intended to deter and intercept militants, they had the unintended consequence of delaying Palestinian civilian travel between Palestinian towns, and from Palestinian towns to Israel (B’Tselem (2007), World Bank (2007)). Two World Bank working papers (Cali & Miaari (2014), van der Weide et al (2014)) take advantage of this ‘natural experiment’ to study the effects of travel costs on commuters’ welfare, finding that economic outcomes of Palestinians declined in the face of obstacle deployment. My job market paper, however, finds a very different result: while obstacles reduced the welfare of laborers in some towns, laborers from other towns actually benefited from obstacles. The salient outcome of obstacle deployment was not welfare reduction, but rather welfare inequality.

Where the Rubber Meets the Road: Impact Evaluation in Transport

Arianna Legovini's picture
I was recently invited to speak at the biannual infrastructure retreat of the IADB and was excited to learn that they had decided to devote two days of their retreat to discussing the development of an impact evaluation (IE) program in the transport sector. This is largest sector in most development banks, yet one that has not caught the IE bug. Perhaps this is because there is a perception that IE is difficult or impossible to incorporate into transportation projects.

Taking the Bus to Opportunity: Guest post by David Phillips

In the 1960s, black and white individuals in the United States had radically different labor market outcomes. In 1962, the unemployment rate for African-Americans was 13 percent while it was only 6 percent for whites. Fifty years have passed, enough time for Martin Luther King to go from movement leader to monument, but as of 2010, the unemployment rate in the U.S.