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Does Privatization Deliver? Access to Telephone Services and Household Income in Poor Rural Areas Using a Quasi-Natural Experiment in Peru

  • Alberto Chong

    ()

  • Virgilio Galdo
  • Máximo Torero

This paper takes advantage of a quasi-natural experiment in Peru by which the privatized telecommunications company was required by government to randomly install and operate public pay phones in small rural towns throughout the national territory. Using a specially designed household survey for a representative sample of rural towns, it is possible to link access to telephone services with household income. It was found that, regardless of the income measurement, most characteristics of public telephone usage are positively linked with income. Remarkably, the benefits occur at both non-farm and farm income levels. Not only do the findings hold when using instrumental variables, but they are also further confirmed when using propensity scores matching methods.

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File URL: http://www.iadb.org/research/pub_hits.cfm?pub_id=WP-535&pub_file_name=pubWP-535.pdf
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Paper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 4417.

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Date of creation: Dec 2005
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Handle: RePEc:idb:wpaper:4417
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  1. George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213.
  2. Escobal, Javier, 2001. "The Determinants of Nonfarm Income Diversification in Rural Peru," World Development, Elsevier, vol. 29(3), pages 497-508, March.
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  5. Alberto Chong & Florencio Lopez-de-Silanes, 2004. "Privatization in Mexico," Research Department Publications 4373, Inter-American Development Bank, Research Department.
  6. Sebastian Galiani & Paul Gertler & Ernesto Schargrodsky, 2005. "Water for Life: The Impact of the Privatization of Water Services on Child Mortality," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 83-120, February.
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  8. Kebede, Yohannes & Gunjal, Kisan & Coffin, Garth, 1990. "Adoption of new technologies in Ethiopian agriculture: The case of Tegulet-Bulga district Shoa province," Agricultural Economics, Blackwell, vol. 4(1), pages 27-43, April.
  9. Godtland, Erin M & Sadoulet, Elisabeth & De Janvry, Alain & Murgai, Rinku & Ortiz, Oscar, 2004. "The Impact of Farmer Field Schools on Knowledge and Productivity: A Study of Potato Farmers in the Peruvian Andes," Economic Development and Cultural Change, University of Chicago Press, vol. 53(1), pages 63-92, October.
  10. Bayes, Abdul, 2001. "Infrastructure and rural development: insights from a Grameen Bank village phone initiative in Bangladesh," Agricultural Economics, Blackwell, vol. 25(2-3), pages 261-272, September.
  11. Dilip Mookherjee & David McKenzie, 2001. "The Distributive Impact of Privatization in Latin America: Evidence from Four Countries," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-128, Boston University - Department of Economics, revised 2002.
  12. Feather, Peter M. & Amacher, Gregory S., 1994. "Role of information in the adoption of best management practices for water quality improvement," Agricultural Economics, Blackwell, vol. 11(2-3), pages 159-170, December.
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  14. Jacoby, Hanan G., 1998. "Access to markets and the benefits of rural roads," Policy Research Working Paper Series 2028, The World Bank.
  15. Rama,Martin G., 1997. "Efficient public sector downsizing," Policy Research Working Paper Series 1840, The World Bank.
  16. Jonathan Isham, 2002. "The Effect of Social Capital on Fertilizer Adoption: Evidence from Rural Tanzania," Middlebury College Working Paper Series 0225, Middlebury College, Department of Economics.
  17. Jalan, Jyotsna & Ravallion, Martin, 2003. "Does piped water reduce diarrhea for children in rural India?," Journal of Econometrics, Elsevier, vol. 112(1), pages 153-173, January.
  18. Matambalya, Francis & Wolf, Susanna, 2001. "The Role Of Ict For The Performance Of Smes In East Africa. Empirical Evidence From Kenya And Tanzania," Discussion Papers 18717, University of Bonn, Center for Development Research (ZEF).
  19. Kebede, Yohannes & Gunjal, Kisan & Coffin, Garth, 1990. "Adoption of New Technologies in Ethiopian Agriculture: The Case of Tegulet-Bulga District, Shoa Province," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 4(1), April.
  20. Albert Chong & Florencio López-de-Silanes, 2004. "Privatization in Latin America: What Does the Evidence Say?," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  21. Feather, Peter M. & Amacher, Gregory S., 1994. "Role of information in the adoption of best management practices for water quality improvement," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 11(2-3), December.
  22. Thomas N. Hubbard, 2003. "Information, Decisions, and Productivity: On-Board Computers and Capacity Utilization in Trucking," American Economic Review, American Economic Association, vol. 93(4), pages 1328-1353, September.
  23. Bayes, Abdul, 2001. "Infrastructure and rural development: insights from a Grameen Bank village phone initiative in Bangladesh," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 25(2-3), September.
  24. Alberto E. Chong & Florencio López-de-Silanes, 2004. "Privatization in Mexico," IDB Publications (Working Papers) 6682, Inter-American Development Bank.
  25. Babcock, Bruce A., 1990. "Value of Weather Information in Market Equilibrium (The)," Staff General Research Papers 10592, Iowa State University, Department of Economics.
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