A GWR Estimation of heterogeneity of the extent to which roads and rails explain economic development in Bolivia
INTRODUCTION
Roads are very important connectors for economic development. In that, roads connect producers to the market, the sick can access treatment centers while students can access schools via roads towards human capital development hence, Roads can be a vital part of the heartbeat of economic development Berge et al (2015). Roads can therefore link accurately with multidimensional poverty reduction.
According to the United Nations, Sustainable development is about all-inclusive economic growth, social inclusion, and environmental protection in terms of industrialization. SDG’s objective to close the gap between economic development inequality and economic growth in a sustainable way is owned nationally by counties and each country oversees driving their own affairs. The main agenda of the SDGs is to eradicate poverty in all its form to create a peaceful and prosperous sustainable way everywhere leaving no one behind. The SDGs were developed through a consensus agreement among global governments and one key element is development ownership by governments to ensure sustainability. SDGs, Goal 1 is towards the eradication of extreme poverty and its target SDG1_2 is to reduce poverty in all its dimensions at least by half. Among the 17 indicators identified as key indicators to poverty eradication is Goal nine (SDG_9) which is to build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation. More specific are sub-measurable key indicators such as SDG_9_1 which represents the development of quality infrastructure that supports quality human life and SDG_9_1 which specifically monitor primary roads, routes, and railroads leaving and coming to districts, Bolivian SDG report (2020). This key indicator is responsible for interconnecting highly privileged areas to the less privileged areas, hence access to basic needs such as schools and hospitals can be made easy for human capital development. Also, with the availability of roads and routes, training between parties both locally and internationally can be achievable. Transport is known to support economic development by its unique linkage system and network connecting various sectors. For it to work, transport system requires to be coupled with other policies than compliment it to support its relevance for developing countries, Berg et al, (2015).
LITERATURE REVIEW
In a review of 160 transport policy documents, Berg et al, (2015) concluded that the most important infrastructure options that policymakers jump at are road construction for infrastructure development which is not always what is needed for sustainable economic development. It further highlights the importance of considering many many other important options in making transport policy choices for achieving sustainable economic development. The knowledge gap in the sector is one of the limits to achieving a concrete transport policy that works and this is largely due to limits of research and the use of ''one fits all policy'' without considering heterogeneity across space. In a study by C P Ng et al (2019), using 30 years cross sectional country analysis with 60countries, results indicate growth in road length per thousand population, per capita export, per capita education expenditure, and physical capital stock per worker have a positive effect on economic growth. However, the relationship between urbanization and economic growth was found to be inverted U-shaped, meaning that economic growth increases at low levels of urbanization but decreases once a threshold level is exceeded.
In a paper analyzing the effect of access to the market on regional economic development across Europe using data from the 19th century. regional economic clusters were proxied using access to the market within a 3-hour drive or travel. Potential heterogeneity was determined using different levels of economic development in each region. From the results, the most positive effect of roads on economic development is access to the market for which every 1% increase in access market increases GDP in the regions in Europe on average by 0.2% strongest with the longest distance to the market. Increasing employment by 0.6% and population increase by 0.7%, Martin et al, (2020). On average roads contribute to a 3.5% increase in GDP in India Bhakti Jain and Ishitar Dhar (2022). Roads are altogether important for economic development but their impact varies across space.
METHODOLOGY
The paper estimates a spatial linear regression technique called Geographically Weighted Regression (GWR) which captures linear relationship variations in the context of space. GWR provides location-specific estimates of each parameter and helps analyze the correlation between two sustainability goals (SDG 2_1 and SDG 9_1) for 359 districts in Bolivia.
Preparing The Environment
LOAD DATA SETS
Geojason file dataset
DATA DEFINITIONS
DESCRIPTIVE STATISTICS
Defining regression variables
Multidimensional Poverty Indicator (MDI) which represents SDG1_2, is the dependent variable while the independent variable is the routes representing SDG9_1.
OLS REGRESSION
ESTIMATION OF THE GWR REGRESSION MODEL
Bandwith selection
Calibrating GWR Model using AIC Criteria
GWR Model Bandwidth
GWR Regression Results
Model Fit
RESULTS AND DISCUSSION
DELIMITATION
Conducting a heterogeneity test using the Monte Carlo test of spatial variability which will estimate a p-value that if less than 0.05 will reject the null hypothesis that there is spatial homogeneity and hence the confirmation of the existence of spatial heterogeneity of the correlation coefficients estimated in the GWR across districts in the Bolivian space. It could not be estimated because it was computationally too expensive and time-consuming for this notebook though very important. That was not estimated. Continuous efforts will go on to establish this estimation later in this research.