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The Role of Price Information in Agricultural Markets: Experimental Evidence from Rural Peru

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  • Nakasone, Eduardo

Abstract

This paper presents new experimental evidence on the role of price information in agricultural markets. For this purpose, I set up a Randomized Control Trial (RCT) in the central highlands of Peru. A group of farmers in randomly selected villages got access to detailed price information for the most relevant local crops in six regional markets through cell phone SMS. The information was delivered throughout the four-month period immediately after harvest, where they sell most of their production. I find that the beneficiaries got higher sales prices for their products, compared to households in the control group. The effect is robust to different specifications. I also find that this effect was mostly driven by increases in the prices for relatively more perishable crops, for which information could be more valuable. Additionally, information made farmers more likely to sell their production (extensive margin). Albeit not statistically significant, the estimate for sales on the intensive margin are positive and quite large. Finally, I also investigate the possibility of information spillovers by examining marketing outcomes of households who did not receive the information but lived in villages where others did. I do not find any significant effects among households in this group.

Suggested Citation

  • Nakasone, Eduardo, 2013. "The Role of Price Information in Agricultural Markets: Experimental Evidence from Rural Peru," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150418, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea13:150418
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    Cited by:

    1. Arimoto, Yutaka & Kono, Hisaki & Ralandison, Tsilavo & Sakurai, Takeshi & Takahashi, Kazushi, 2015. "Understanding traders' regional arbitage : the case of rice traders in Antananarivo, Madagascar," IDE Discussion Papers 505, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    2. Jenny C. Aker & Marcel Fafchamps, 2015. "Mobile Phone Coverage and Producer Markets: Evidence from West Africa," World Bank Economic Review, World Bank Group, vol. 29(2), pages 262-292.
    3. Eduardo Nakasone & Maximo Torero, 2016. "A text message away: ICTs as a tool to improve food security," Agricultural Economics, International Association of Agricultural Economists, vol. 47(S1), pages 49-59, November.
    4. Sandip Mitra & Dilip Mookherjee & Maximo Torero & Sujata Visaria, 2018. "Asymmetric Information and Middleman Margins: An Experiment with Indian Potato Farmers," The Review of Economics and Statistics, MIT Press, vol. 100(1), pages 1-13, March.
    5. David-Benz, Hélène & Andriandralambo, Norontsoa & Soanjara, Helgina & Chimirri, Chiara & Rahelizatovo, Noro & Rivolala, Bezaka, 2016. "Improving access to market information: a driver of change in marketing strategies for small producers?," 149th Seminar, October 27-28, 2016, Rennes, France 245073, European Association of Agricultural Economists.
    6. Larochelle, Catherine & Alwang, Jeffrey & Travis, Elli, 2016. "Did you really get the message? Using text reminders to stimulate adoption of agricultural technologies," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235423, Agricultural and Applied Economics Association.

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    Keywords

    Agricultural and Food Policy; Demand and Price Analysis; International Relations/Trade;

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