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Information Access and Smallholder Farmers’ Selling Decisions in Peru

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  • Salas Garcia, Vania B.
  • Fan, Qin

Abstract

Previous studies have examined the effects of information access on rural price dispersion and local economy in developing countries, but few studies investigate information access on farmers’ selling decisions that directly relate to individual farmer’s utility and welfare. No study, to our knowledge, has particularly examined the effects of information access on smallholder farmers in Peru who generally occupy plots of less than five hectares and face enormous disadvantages. To bridge the gap in the literature, we employ an instrumental variable (IV) approach and seemingly unrelated regression (SUR) to examine the effects of internet and cell phones on Peruvian smallholder farmers’ selling decisions using IV Agricultural Census (IV CENAGRO) of Peru data for the year 2012. Results suggest that internet positively affects Peruvian smallholder farmers’ decisions to sell in both national and international markets and tends to have larger impact on decisions to sell in the national market. Mobile phones have smaller impacts compared to internet and only affect farmers’ decisions to sell in the international market. Results provide empirical support for policies and social programs that promote internet usage and mobile phone coverage for rural Peru, which are important channels to enhance information access for economically disadvantaged smallholder farmers. Our results also suggest that ignoring endogeneity of information access understates its effects.

Suggested Citation

  • Salas Garcia, Vania B. & Fan, Qin, 2015. "Information Access and Smallholder Farmers’ Selling Decisions in Peru," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205380, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea15:205380
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    File URL: http://ageconsearch.umn.edu/record/205380/files/paper6723_SALAS_FAN.pdf
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    References listed on IDEAS

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    1. Vakis, Renos & Sadoulet, Elisabeth & de Janvry, Alain, 2003. "Measuring Transactions Costs from Observed Behavior: Market Choice in Peru," CUDARE Working Papers 25110, University of California, Berkeley, Department of Agricultural and Resource Economics.
    2. Alene, Arega D. & Manyong, V.M. & Omanya, G. & Mignouna, H.D. & Bokanga, M. & Odhiambo, G., 2008. "Smallholder market participation under transactions costs: Maize supply and fertilizer demand in Kenya," Food Policy, Elsevier, vol. 33(4), pages 318-328, August.
    3. Giacomo Zanello, 2012. "Mobile Phones and Radios: Effects on Transactions Costs and Market Participation for Households in Northern Ghana," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(3), pages 694-714, September.
    4. Renkow, Mitch & Hallstrom, Daniel G. & Karanja, Daniel D., 2004. "Rural infrastructure, transactions costs and market participation in Kenya," Journal of Development Economics, Elsevier, vol. 73(1), pages 349-367, February.
    5. Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
    6. Vakis, Renos & Sadoulet, Elisabeth & de Janvry, Alain, 2003. "Measuring Transactions Costs from Observed Behavior: Market Choices in Peru," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt7p81h66q, Department of Agricultural & Resource Economics, UC Berkeley.
    7. Klonner, Stefan & Nolen, Patrick J., 2010. "Cell Phones and Rural Labor Markets: Evidence from South Africa," Proceedings of the German Development Economics Conference, Hannover 2010 56, Verein für Socialpolitik, Research Committee Development Economics.
    8. George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213-213.
    9. Jenny C. Aker, 2010. "Information from Markets Near and Far: Mobile Phones and Agricultural Markets in Niger," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 46-59, July.
    10. Beuermann, Diether W., 2011. "Telecommunications Technologies, Agricultural Profitability, and Child Labor in Rural Peru," Working Papers 2011-002, Banco Central de Reserva del Perú.
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    Cited by:

    1. Zhao, Jianmei, 2018. "Internet access and rural household income in China," 2018 Annual Meeting, August 5-7, Washington, D.C. 274178, Agricultural and Applied Economics Association.

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    Keywords

    Community/Rural/Urban Development; International Development; Political Economy;

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