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Information, Direct Access to Farmers, and Rural Market Performance in Central India

  • Aparajita Goyal

This paper estimates the impact of a change in procurement strategy of a private buyer in the central Indian state of Madhya Pradesh. Beginning in October 2000, Internet kiosks and warehouses were established that provide wholesale price information and an alternative marketing channel to soy farmers in the state. Using a new market-level dataset, the estimates suggest a significant increase in soy price after the introduction of kiosks, supporting the predictions of the theoretical model. Moreover, there is a robust increase in area under soy cultivation. The results point toward an improvement in the functioning of rural agricultural markets. (JEL O13, O18, Q12, Q13)

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Article provided by American Economic Association in its journal American Economic Journal: Applied Economics.

Volume (Year): 2 (2010)
Issue (Month): 3 (July)
Pages: 22-45

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Handle: RePEc:aea:aejapp:v:2:y:2010:i:3:p:22-45
Note: DOI: 10.1257/app.2.3.22
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  1. Burgess, Robin & Pande, Rohini, 2004. "Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment," CEPR Discussion Papers 4211, C.E.P.R. Discussion Papers.
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  5. George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213.
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  7. Jeffrey R. Brown & Austan Goolsbee, 2002. "Does the Internet Make Markets More Competitive? Evidence from the Life Insurance Industry," Journal of Political Economy, University of Chicago Press, vol. 110(3), pages 481-507, June.
  8. A. Banerji & J. V. Meenakshi, 2004. "Millers, Commission Agents and Collusion in Grain Auction Markets: Evidence from Basmati Auctions in North India," Working papers 129, Centre for Development Economics, Delhi School of Economics.
  9. Stahl, Dale O, II, 1989. "Oligopolistic Pricing with Sequential Consumer Search," American Economic Review, American Economic Association, vol. 79(4), pages 700-712, September.
  10. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, June.
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  12. Alan T. Sorensen, 2000. "Equilibrium Price Dispersion in Retail Markets for Prescription Drugs," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 833-862, August.
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