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Does Digital Divide or Provide? The Impact of Cell Phones on Grain Markets in Niger

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  • Jenny Aker

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    Abstract

    Cell phones are quickly transforming markets in low-income countries. The effect is particularly dramatic in rural areas of sub-Saharan Africa, where cell phones often represent the first telecommunications infrastructure. Niger had approximately 2 landlines for every 1,000 people when mobile phones were first introduced in 2001. Since that time, mobile phone coverage has increased significantly throughout the country, with over 78 percent of markets covered by 2007. This working paper assesses the impact of mobile phones on grain market performance in one of the world’s poorest countries. Aker finds that the introduction of mobile phones is associated with a 20-percent reduction in grain price differences across markets, with a larger impact for markets that are farther apart and those that are linked by poor-quality roads. Cell phones also have a larger impact over time: as more markets have cell phone coverage, the greater the reduction in price differences. This is primarily due to changes in grain traders’ marketing behavior: cell phones lead to reduced search costs, more market information and increased efficiency in moving goods across the country. Aker concludes by outlining the ways in which information technology can be used as an effective poverty-reduction strategy in low-income countries.

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    File URL: http://www.cgdev.org/content/publications/detail/894410
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    Bibliographic Info

    Paper provided by Center for Global Development in its series Working Papers with number 154.

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    Length: 64 pages
    Date of creation: Oct 2008
    Date of revision:
    Handle: RePEc:cgd:wpaper:154

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    Web page: http://www.cgdev.org

    Related research

    Keywords: Africa; Information; Information Technology; Market Performance; Search Costs; Niger;

    This paper has been announced in the following NEP Reports:

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    Cited by:
    1. Staatz, John M. & Kizito, Andrew M. & Weber, Michael T. & Dembele, Niama Nango, 2011. "Evaluating the Impact on Market Performance of Investments in Market Information Systems: Methodological Challenges," Staff Papers 108184, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    2. Ankur Sarin & Rekha Jain, 2009. "Effect of Mobiles on Socio-economic Life of Urban Poor," Working Papers id:1984, eSocialSciences.
    3. Adriana Camacho & Emily Conover & econover@hamilton.edu, 2010. "The Impact of Receiving Price and Climate Information in the Agricultural Sector," DOCUMENTOS CEDE 007907, UNIVERSIDAD DE LOS ANDES-CEDE.
    4. Bernard, Tanguy & Torero, Maximo, 2011. "Randomizing the "Last Mile": A methodological note on using a voucher-based approach to assess the impact of infrastructure projects," IFPRI discussion papers 1078, International Food Policy Research Institute (IFPRI).

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