Key rural infrastructure investments can have a long lasting impact on the poor if they are able to open and sustain new market opportunities.
Looking at rural households living in some of the poorest districts of Peru, this study compares (using propensity score matching techniques) households located near rehabilitated roads to suitable controls. Results show that rehabilitated road accessibility can be related to changes in income sources, as the rehabilitated road enhances non-agricultural labor market opportunities, especially from wage-employment sources.
The study also finds that income expansion may not been matched by an equivalent consumption increase; apparently because the additional income is allocated to savings, through increments in livestock, most likely because road quality improvement is being perceived as transitory.
This result alerts for the need of ensuring that rehabilitation activities are not transitory but rather that maintenance is guaranteed, in order to allow rural households to make long-term decisions about investment and consumption that could maximize the benefits of their new market linkages.