The impact of roads and agricultural extension on consumption growth and poverty in fifteen Ethiopian villages.

This paper investigates whether public investments that led to improvements in road quality and increased access to agricultural extension services led to faster consumption growth and lower rates of poverty in rural Ethiopia. Using a Generalized Methods of Moments - Instrumental Variables - Household Fixed Effects estimator, we find evidence of positive impacts with meaningful magnitudes. Access to all-weather roads increases consumption growth by 16 per cent and, reduces the incidence of poverty by 6.7 per cent. Receiving at least one visit from an extension agent raises consumption growth by 7 per cent and reduces poverty incidence by nearly 10 per cent. These results are robust to changes in model specification and estimation methods