Did expenditure on access to rural roads irrigation
infrastructure, and extension services have significant impact
on household welfare over the period of Ninth Five-Year Plan
(1997-2002) in Nepal? A new research monograph by IFPRI shows
that the effect of rural roads is robust across two different
econometric strategies, while the effect of irrigation and
extension services on household welfare is less robust. Access
to rural roads improved households’ welfare as measured by land
values, consumption growth, poverty reduction, and agricultural
income growth. The research also shows statistically significant
impacts of irrigation using a hedonic model, while an
alternative panel data approach did not yield significant
estimates of the impact of access to irrigation or extension
services. What explains this inconsistency? The authors point
their fingers to measurement inaccuracies of the irrigation
variable at the household level, which is aggregated from the
plot level, rather than to true ineffectiveness. The