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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.

Suggested Citation

  • Jenny Aker, 2008. "Does Digital Divide or Provide? The Impact of Cell Phones on Grain Markets in Niger," Working Papers 154, Center for Global Development.
  • Handle: RePEc:cgd:wpaper:154
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    File URL: http://www.cgdev.org/content/publications/detail/894410
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    Cited by:

    1. Minten, Bart & Reardon, Thomas & Singh, K.M. & Sutradhar, Rajib, 2010. "The benefit of cold storages: Evidence from Bihar," MPRA Paper 54345, University Library of Munich, Germany, revised 14 Dec 2010.
    2. Karippacheril, Tina George & Nikayin, Fatemeh & de Reuver, Mark & Bouwman, Harry, 2013. "Serving the poor: Multisided mobile service platforms, openness, competition, collaboration and the struggle for leadership," Telecommunications Policy, Elsevier, vol. 37(1), pages 24-34.
    3. Richard A. Duncombe, 2014. "Understanding the Impact of Mobile Phones on Livelihoods in Developing Countries," Development Policy Review, Overseas Development Institute, vol. 32(5), pages 567-588, September.
    4. Julius Juma Okello & Yuan Zhou & Norman Kwikiriza & Sylvester Ochieng Ogutu & Ian Barker & Elmar Schulte-Geldermann & Elly Atieno & Justin Taj Ahmed, 2016. "Determinants of the Use of Certified Seed Potato among Smallholder Farmers: The Case of Potato Growers in Central and Eastern Kenya," Agriculture, MDPI, Open Access Journal, vol. 6(4), pages 1-12, October.
    5. 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).
    6. Minten, Bart & Reardon, Thomas & Singh, K.M. & Sutradhar, Rajib, 2011. "The potato value chain in Bihar: An assessment and policy implications," MPRA Paper 54350, University Library of Munich, Germany, revised 14 Jan 2011.
    7. 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.
    8. Muto, Megumi & Yamano, Takashi, 2009. "The Impact of Mobile Phone Coverage Expansion on Market Participation: Panel Data Evidence from Uganda," World Development, Elsevier, vol. 37(12), pages 1887-1896, December.
    9. Aker, Jenny C. & Ninno, Carlo del & Dorosh, Paul A. & Mulder-Sibanda, Menno & Razmara, Setareh, 2009. "Niger - Food security and safety nets," Social Protection and Labor Policy and Technical Notes 91576, The World Bank.
    10. Nancy Chau & Hideaki Goto & Ravi Kanbur, 2016. "Middlemen, fair traders, and poverty," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(1), pages 81-108, March.
    11. Tschirley, David L. & Jayne, T.S., 2010. "Exploring the Logic Behind Southern Africa's Food Crises," World Development, Elsevier, vol. 38(1), pages 76-87, January.
    12. PENARD Thierry & POUSSING Nicolas & ZOMO YEBE Gabriel & NSI ELLA Philémon, 2012. "Usage d'Internet et du téléphone mobile en Afrique : une comparaison des déterminants d'adoption sur données gabonaises," LISER Working Paper Series 2012-15, LISER.
    13. Kirui, Oliver K. & Okello, Julius J. & Nyikal, Rose A. & Njiraini, Georgina W., 0. "Impact of Mobile Phone-Based Money Transfer Services in Agriculture: Evidence from Kenya," Quarterly Journal of International Agriculture, Humboldt-Universität zu Berlin, vol. 52.
    14. Balwant Singh Mehta & Nidhi Mehta, 2014. "ICT and Socio-Economic Empowerment of Rural Women: Case of Mobile Phone in India," Knowledge Horizons - Economics, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 6(4), pages 103-112, December.
    15. Blumenstock, Joshua E. & Eagle, Nathan & Fafchamps, Marcel, 2016. "Airtime transfers and mobile communications: Evidence in the aftermath of natural disasters," Journal of Development Economics, Elsevier, vol. 120(C), pages 157-181.
    16. 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.
    17. Ochieng’, Sylvester O. & Okello, Julius J. & Otieno, David J., 2012. "Impact of ICT-based Market Information Service Projects on Smallholder Farm Input Use and Productivity in Kenya," 2012 Eighth AFMA Congress, November 25-29, 2012, Nairobi, Kenya 159429, African Farm Management Association (AFMA).

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    Keywords

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

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