Infrastructure and household poverty in Brazil: A regional approach using multilevel models

Abstract

Abstract Many scholars have highlighted the role of infrastructure investments in promoting economic growth along with poverty reduction and social inclusion. Developing economies show substantial discrepancies in terms of infrastructure in the rural–urban, regional and income dimensions. These disparities may be reinforcing a social and economic framework marked by a large portion of the population living in poverty. In a scenario characterized by immense regional and income heterogeneities, the present study aims to evaluate the effect of infrastructure investments on household poverty in Brazil. In addition, we verify whether these effects vary according to infrastructure characteristics such as provision, quality and access. The analysis is based on detailed household microdata from the Demographic Census and infrastructure variables at the municipal and state levels, captured from a variety of data sources. An additional contribution of the paper is the novel application of multilevel logistic models to investigate the relationship between infrastructure and poverty at household, municipal and state levels. Our results demonstrate negative effects of the infrastructure provision on poverty. These effects, in turn, are strengthened when infrastructure quality and access are greater, which allows us to infer about the importance of public policies aimed at achieving lower inequalities in access to basic sanitation, Internet, transportation, telephone services and electricity. These policies should also take into account the infrastructure heterogeneities at the regional level, since such heterogeneities have been important in explaining household poverty.