For road-related logistics in China, Fan and Kang (2008) estimate the impact of
road investments on overall economic growth, rural and urban growth, and rural
and urban poverty reduction. An econometric model that captures the different
channels through which road investment impacts growth and poverty is developed
and estimated using Chinese provincial-level data. Low-grade (mostly rural) roads
have benefit/cost ratios for national GDP that are about four times larger than the
benefit/cost ratios of high-grade roads. Low-grade roads raise far more rural and
urban poor above the poverty line per RMB invested than do high-grade roads.
Road investments yield their highest economic returns in the eastern and central
regions of China, while their contributions to poverty reduction are greatest in
western China (especially the southwest region