Everyone intuitively understands that it’s hard to get access to the latest or fanciest consumer products in remote rural areas. Over at VoxDev, Jan Willem Gunning, Pramila Krishnan, Andualem T Mengistu, and Peng Zhang share some recent research where they’ve quantified this in Ethiopia. As they note,
We find that remoteness sharply reduces the variety of consumer goods available. For an average village, a fall of an hour in travel time is associated with an increase of about nine items or 18 brands of these items.
Ethiopia is a particularly apt location for this study.
The country is landlocked and internal trade costs are strongly affected by its particular physical geography. It has a mean elevation of over 1000 metres and the bulk of the population lives on the high plateau, a terrain wrinkled with steep hills and mountains.
As a result, Ethiopia has one of the lowest road densities in the world, despite substantial investment in new roads over the last decade. In addition, the low urbanisation rates (at 17% compared to a sub-Saharan average of 33%) imply that households face markets distant from them. This particularly affects their access to manufactured goods.