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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. Lopez-de-Silanes, Florencio, 1997. "Determinants of Privatization Prices," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 965-1025, November.
  2. Lars-Hendrik Roller & Leonard Waverman, 2001. "Telecommunications Infrastructure and Economic Development: A Simultaneous Approach," American Economic Review, American Economic Association, vol. 91(4), pages 909-923, September.
  3. George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213.
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  6. Jonathan Isham, 2002. "The Effect of Social Capital on Fertilizer Adoption: Evidence from Rural Tanzania," Middlebury College Working Paper Series 0225, Middlebury College, Department of Economics.
  7. Jalan, Jyotsna & Ravallion, Martin, 2003. "Does piped water reduce diarrhea for children in rural India?," Journal of Econometrics, Elsevier, vol. 112(1), pages 153-173, January.
  8. 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.
  9. Escobal, Javier, 2001. "The Determinants of Nonfarm Income Diversification in Rural Peru," World Development, Elsevier, vol. 29(3), pages 497-508, March.
  10. Godtland, Erin & Sadoulet, Elisabeth & de Janvry, Alain & Murgai, Rinku & Ortiz, Oscar, 2003. "The Impact of Farmer-Field-Schools on Knowledge and Productivity: A Study of Potato Farmers in the Peruvian Andes," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt8hp835xx, Department of Agricultural & Resource Economics, UC Berkeley.
  11. Stiglitz, Joseph E., 2001. "Information and the Change in the Paradigm in Economics," Nobel Prize in Economics documents 2001-8, Nobel Prize Committee.
  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, Blackwell, vol. 4(1), pages 27-43, April.
  13. Rama,Martin G., 1997. "Efficient public sector downsizing," Policy Research Working Paper Series 1840, The World Bank.
  14. 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.
  15. 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.
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