December 2018

IZA DP No. 12018: Bright Investments: Measuring the Impact of Transport Infrastructure Using Luminosity Data in Haiti

Oscar A. Mitnik, Raul Sanchez, Patricia Yanez-Pagans

This paper quantifies the impacts of transport infrastructure investments on economic activity in Haiti, using satellite night-light luminosity as a proxy measure. Our identification strategy exploits the differential timing of rehabilitation projects across various road segments of the primary road network. We combine multiple sources of non-traditional data and carefully address concerns related to unobserved heterogeneity. The results obtained across multiple specifications consistently indicate that receiving a road rehabilitation project leads to an increase in luminosity values of between 6% and 26% at the communal section level. Taking into account the national level elasticity between luminosity values and GDP, we approximate that these interventions translate into communal section-GDP increases of between 0.5% and 2.1%, for communal sections benefited by a transport infrastructure project. We observe temporal and spatial variation in results, and crucially that the larger impacts appear once projects are completed and are concentrated within 2 km buffers around the intervened roads. Neither the richest or the poorest communities reap the benefits from road improvements, with gains accruing to those in the middle of the ranking of communal sections, based on unsatisfied basic needs. Our findings provide novel evidence on the role of transport investments in promoting economic activity in developing countries.