Farther on Down the Road: Transport Costs, Trade and Urban Growth in Sub-Saharan Africa

Adam Storeygard, Brown University

This paper investigates the role of inter-city transport costs in determining the economic activity of cities in sub-Saharan Africa. I consider how periphery cities with lower transport costs to their country's main port grow compared to those further away. Transport costs are identified by interacting oil prices with road network distances. Using a new 17-year panel of satellite data on lights at night as a proxy for economic activity in 287 cities in 15 countries, I find that annual increases in transport costs increase the growth advantage of near cities over far ones substantially, implying an elasticity of city economic activity with respect to transport costs of about -0.2. Cities connected to the port by paved roads are chiefly affected by transport costs to the port, while cities connected to the port by unpaved roads are more affected by connections to secondary centers.