Researcher: Golvine de Rochambeau, PhD Student in Economics

Understanding trade barriers is key to finding efficient policies that promote growth. In West Africa, land transport prices are among the highest in the world and many markets are still isolated. In those markets, high transport prices result in high commodity prices and low demand, which impedes growth. The goal of this project is to study and understand high transport prices in Liberia, and give policy makers the tools to tackle them.

To understand transport prices, I collect monthly data on prices and costs for trucking companies. In the past, economists measured marginal costs indirectly. David Atkin and Dave Donaldson (2012) estimated transport costs by using a very detailed price data. In this project, I propose a direct measure of the costs inferred by the firms and the prices they charge. This will allow me to reconcile the indirect measure of transport costs with the true prices charged by these companies.

To measure inefficiencies in the transport sector and whether they have an impact on the prices charged by these companies, I also conduct a randomized control trial. I randomly assign GPS trackers to trucks in the sample to allow owners of the trucks to closely monitor the drivers. GPS trackers are very unusual in Liberia, and they allow the owner to ensure that the trucks are used for their purpose. To ensure I capture all the effects of the GPS tracker on the company, I interview both drivers and managers in the company before and after the installation of the GPS tracker.