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Mobile Phone Coverage and Producer Markets: Evidence from West Africa

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  • Fafchamps, Marcel
  • Aker, Jenny

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.

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  • Fafchamps, Marcel & Aker, Jenny, 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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    More about this item

    Keywords

    Africa; Information; Information technology; Market performance; Niger; Search costs;
    All these keywords.

    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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