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Does Privatization Deliver? Access to Telephone Services and Household Income in Poor Rural Areas Using a Quasi-Natural Experiment for Peru

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  • Chong, Alberto E.
  • Galdo, Virgilio
  • Torero, Maximo

Abstract

We take advantage of a quasi-natural experiment in Peru by which the privatized telecommunications company was required by government to randomly install and operate public pay phones on small rural towns along the national territory. Using a especially designed household survey for a representative sample of rural towns we are able to link access to telephone services with household income. We find, that regardless of the income measurement, most characteristics of public telephone are positively linked with income. Remarkably, the benefits are given at both non-farm and farm income levels. Not only do the findings hold when using instrumental variables but they are further confirmed when using propensity scores matching methods.

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Bibliographic Info

Paper provided by International Association of Agricultural Economists in its series 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia with number 25691.

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Date of creation: 2006
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Handle: RePEc:ags:iaae06:25691

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Keywords: Privatization; Institutions; Rural; Poverty; Telecommunications; Consumer/Household Economics; G32; H10; J45; O1;

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  1. Godtland, Erin M & Sadoulet, Elisabeth & De Janvry, Alain & Murgai, Rinku & Ortiz, Oscar, 2004. "The Impact of Farmer Field Schools on Knowledge and Productivity: A Study of Potato Farmers in the Peruvian Andes," Economic Development and Cultural Change, University of Chicago Press, vol. 53(1), pages 63-92, October.
  2. Florencio Lopez-de-Silane, 1996. "Determinants of Privatization Prices," NBER Working Papers 5494, National Bureau of Economic Research, Inc.
  3. Jalan, Jyotsna & Ravallion, Martin, 2001. "Does piped water reduce diarrhea for children in rural India ?," Policy Research Working Paper Series 2664, The World Bank.
  4. George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213.
  5. Kebede, Yohannes & Gunjal, Kisan & Coffin, Garth, 1990. "Adoption of new technologies in Ethiopian agriculture: The case of Tegulet-Bulga district Shoa province," Agricultural Economics, Blackwell, vol. 4(1), pages 27-43, April.
  6. Lars-Hendrik Röller & Leonard Waverman, 1996. "Telecommunications Infrastructure and Economic Development: A Simultaneous Approach," CIG Working Papers FS IV 96-16, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  7. Stiglitz, Joseph E., 2001. "Information and the Change in the Paradigm in Economics," Nobel Prize in Economics documents 2001-8, Nobel Prize Committee.
  8. Escobal, Javier, 2001. "The Determinants of Nonfarm Income Diversification in Rural Peru," World Development, Elsevier, vol. 29(3), pages 497-508, March.
  9. Jacoby, Hanan G., 1998. "Access to markets and the benefits of rural roads," Policy Research Working Paper Series 2028, The World Bank.
  10. Rama,Martin G., 1997. "Efficient public sector downsizing," Policy Research Working Paper Series 1840, The World Bank.
  11. Feather, Peter M. & Amacher, Gregory S., 1994. "Role of information in the adoption of best management practices for water quality improvement," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 11(2-3), December.
  12. Kebede, Yohannes & Gunjal, Kisan & Coffin, Garth, 1990. "Adoption of New Technologies in Ethiopian Agriculture: The Case of Tegulet-Bulga District, Shoa Province," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 4(1), April.
  13. Durlauf,S.N., 2001. "On the empirics of social capital," Working papers 3, Wisconsin Madison - Social Systems.
  14. Jonathan Isham, 2002. "The Effect of Social Capital on Fertiliser Adoption: Evidence from Rural Tanzania," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 11(1), pages 39-60, March.
  15. Feather, Peter M. & Amacher, Gregory S., 1994. "Role of information in the adoption of best management practices for water quality improvement," Agricultural Economics, Blackwell, vol. 11(2-3), pages 159-170, December.
  16. Dilip Mookherjee & David McKenzie, 2001. "The Distributive Impact of Privatization in Latin America: Evidence from Four Countries," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-128, Boston University - Department of Economics, revised 2002.
  17. Bayes, Abdul, 2001. "Infrastructure and rural development: insights from a Grameen Bank village phone initiative in Bangladesh," Agricultural Economics, Blackwell, vol. 25(2-3), pages 261-272, September.
  18. Ted Tschang & Mathurot Chuladul & Thuy Thu Le, 2002. "Scaling-up information services for development: a framework of increasing returns for telecentres," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(1), pages 129-141.
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