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Mobile Phone Coverage and Producer Markets: Evidence from West Africa

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  • Aker, Jenny
  • Fafchamps, Marcel

Abstract

Expansion in mobile phone coverage has improved access to information throughout the developing world, particularly within sub-Saharan Africa. The existing evidence suggests that information technology has improved market efficiency and reduced consumer prices for certain commodities. There are fewer studies assessing the impact of the technology on producers. Using market-level data we estimate the impact of mobile phone coverage on producer prices in Niger. We find that mobile phone coverage reduced the spatial dispersion of producer prices by 6 percent for a semi-perishable commodity, cowpea. These effects are strongest for remote markets and lowest at harvest time. Mobile telephony, however, has no effect on price dispersion for millet and sorghum, two storable crops. There is also no impact on the average producer price, but mobile phone coverage is associated with a reduction in the intra-annual price risk, primarily for cowpeas. These findings are confirmed by data from a farmer-level survey: we find that farmers owning mobile phones obtain more price information but do not engage more in spatial arbitrage and hence do not receive higher prices – except for peanuts. The additional evidence presented here helps understand how mobile phone coverage affects agricultural market efficiency in developing countries. It suggests that the impact differs across agents – depending on whether they use the information for arbitrage or not – and across crops – depending on whether inter-temporal arbitrage is possible or not.

Suggested Citation

  • Aker, Jenny & Fafchamps, Marcel, 2013. "Mobile Phone Coverage and Producer Markets: Evidence from West Africa," CEPR Discussion Papers 9491, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:9491
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Aker, Jenny C. & Ksoll, Christopher, 2016. "Can mobile phones improve agricultural outcomes? Evidence from a randomized experiment in Niger," Food Policy, Elsevier, vol. 60(C), pages 44-51.
    2. repec:eee:ecolet:v:159:y:2017:i:c:p:78-81 is not listed on IDEAS
    3. Klaus Deininger & Songqing Jin & Yanyan Liu & Sudhir K Singh, 2016. "Can Labor Market Imperfections Explain Changes in the Inverse Farm Size–Productivity Relationship? Longitudinal Evidence from Rural India," Working Papers id:10987, eSocialSciences.
    4. Kaila Heidi, 2015. "Comparing the development of agricultural technology and information technology in rural Vietnam," WIDER Working Paper Series 091, World Institute for Development Economic Research (UNU-WIDER).
    5. Tadesse, Getaw & Bahiigwa, Godfrey, 2015. "Mobile Phones and Farmers’ Marketing Decisions in Ethiopia," World Development, Elsevier, vol. 68(C), pages 296-307.
    6. Hübler, Michael & Hartje, Rebecca, 2016. "Are smartphones smart for economic development?," Economics Letters, Elsevier, vol. 141(C), pages 130-133.
    7. Abate, Gashaw T. & Bernard, Tanguy, 2017. "Farmers’ quality assessment of their crops and its impact on commercialization behavior: A field experiment in Ethiopia," IFPRI discussion papers 1624, International Food Policy Research Institute (IFPRI).
    8. Robinson, Amanda Lea, 2016. "Internal Borders: Ethnic-Based Market Segmentation in Malawi," World Development, Elsevier, vol. 87(C), pages 371-384.
    9. repec:bla:agecon:v:47:y:2016:i:s1:p:21-33 is not listed on IDEAS
    10. Toya, Hideki & Skidmore, Mark, 2015. "Information/communication technology and natural disaster vulnerability," Economics Letters, Elsevier, vol. 137(C), pages 143-145.
    11. Uwe Deichmann & Aparajita Goyal & Deepak Mishra, 2016. "Will digital technologies transform agriculture in developing countries?," Agricultural Economics, International Association of Agricultural Economists, vol. 47(S1), pages 21-33, November.
    12. IFPRI International Food Policy Research Institute, 2016. "Can Labour Market Imperfections Explain Changes in the Inverse Farm Size-Productivity Relationship?: Longitudinal Evidence from Rural India," Working Papers id:11007, eSocialSciences.
    13. 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.
    14. Wouter Zant, 2017. "Impact of Mobile Phones on Staple Food Markets in Mozambique: Improved Arbitrage or Increased Rent Extraction?," Tinbergen Institute Discussion Papers 17-021/V, Tinbergen Institute, revised 26 Jan 2018.
    15. Bernard, Tanguy & de Janvry, Alain & Mbaye, Samba & Sadoulet, Elisabeth, 2016. "Product Market Reforms and Technology Adoption by Senegalese Onion Producers," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt9wj41042, Department of Agricultural & Resource Economics, UC Berkeley.

    More about this item

    Keywords

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

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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