Mobile phones èEconomic impact in rural areas
ChristophStork,NilushaKapugama&RohanSamarajiva
ThisworkwascarriedoutwiththeaidofagrantfromtheInterna@onalIni@a@veforImpactEvalua@ons(3ie)
About the review • Whatdidwestudy?
• Mobilephoneinterven@onsforimprovingeconomicandproduc-veoutcomesinruralareasinlowandmiddle-incomecountries(LMICs)
• Economicandproduc@veoutcomes=changesin:• Individualincome/savings/wages/expenditure• Householdincome/savings/expenditure• Businessprofit/produc@vity• Wastage• Marketpricedispersionorvola@lity
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What did we do?
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Studiesscreened:8671
Excluded:8630
Cri@callyAppraised:41
Included:14
What did we do?
4
Studiesscreened:9,082
Excludeda\erdetailedabstractandfulltextreview:9,032
Cri@callyAppraised:48
Included:14
Qualita@ve,notmobile,urban,impactnotmeasured,theore@cal,descrip@vestats
What did we find?
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MobilePhones
Impactsduetocoverageexpansionandaccesstoa
phone
Impactsduetomobilephonebased
services
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About the studies
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Author Observa<ons Occupa<ons Dura<on Loca<on
Jensen (2007) 74,700 Fishers, traders 1997-2001 Kerala, India
Aker (2010) 53,820 Traders 1999-2006 Niger
Aker and Fafchamps (2011)
39,120
Traders, farmers 1999-2008 Niger
2,503
Labonne and Chase (2009) 2,092 Farmers 2003-2006 Philippines
Beuermann et al. (2012) 40,000 Cross-sectoral 2001-2007 Peru
Klonner and Nolen (2008) 57,486 Cross-sectoral 1996-2001 South Africa
Findings Author Findings
Jensen (2007)
INR 5 reduc<on in Max-Min spread of prices between market
fishermen’s profits increased on average by 8% consumer price reduced by 4%
5-8% waste reduced to almost 0
Aker (2010) 10%-16% reduc<on in grain price dispersion. The effect is stronger for market pairs with higher transport costs
Aker and Fafchamps (2011)
50% reduc<on in the Max-Min price spread of farm-gate prices within a region
reduces producer price dispersion for cowpeas by 6%. No higher producer prices but lower intra-annual price risk for farmers.
LabonneandChase(2009) increaseingrowthrateofpercapitaconsump@on:15%(excludingcommunica@on)
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Findings
Author Findings
KlonnerandNolen(2008)
Employmentincreasesby15%whenalocalityreceivescompletenetworkcoverage(increasedemploymentbywomen).
Beuermannetal.(2012)
Wageincomeincreasesby15%a\er2yearscoverage,34%a\er6yearsofcoverage.Valueofhouseholdassetsincreasesby23%2yearsa\ercoverage,andincreasesto54%a\er6yearsofcoverage.
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Mobile network expansion has impact • Causalmechanism
• Improvescoordina@onbetweenbuyersandsellersinhithertoseparateagriculturalmarkets,ineffectmergingthemintoabiggermarket• Reducespricedispersion(LawofOnePrice)andalignssupplyanddemand(Say’sLaw)
• Hassimilareffectonlabormarkets• Indirecteffectstoo• InSouthAfricamobilecoverageincreasedlikelihoodofsomeonebeingemployedby33.7%
• Economicimprovementswerereflectedinrisingdisposableincome,householdassetsandthusexpenditure(easiertomeasure)• Expenditureincreasedby44.6%,sixyearsa\ercoveragearrivedinPeru• Resultedinincreasedgrowthofconsump@on(about15%)amongfarmersinPhilippines,excludingcommunica@on-relatedconsump@on
• Butenablingcondi@ons(whichvaryevenwithincountries)mustexist,e.g.,• Evenifprice/demandinforma@onavailablefromnewloca@onthroughmobilecommunica@on,itmustbepossibleforthesupplier/tradertotakecommoditytothatplace:physicaltransport
• Theins@tu@onalcondi@[email protected]/traderisnotempoweredtosellinnewloca@onbyownerofboat/grain,informa@onbyitselfwillnotimproveoutcomes
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MobilePhones
Impactsduetocoverageexpansionandaccesstoa
phone
Impactsduetomobilephonebased
services
11
About the studies
Author Service Offered Sample/obs Dura<on Loca<on
Fafchamps and Minten (2011)
Price, weather and crop advisory informa<on via SMS
1,000 12 months Maharashtra,
India
Parker et al. (2012) Price informa<on via SMS
14,349 12 months (12
days) India
Camacho and Conover (2011)
Price and weather informa<on via SMS
1,107 26 weeks Colombia
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Findings Author Findings
Fafchamps & Minten (2011)
price dispersion Not generalizable
price received by farmers Notgeneralizable
crop loss Notgeneralizable
likelihood of changing crop varie<es and cul<va<on prac<ces
Notgeneralizable
Parker et al. (2012) Price dispersion for crops for each state
5.2% higher spa<al price dispersion during a bulk SMS ban
Camacho & Conover (2011)
sale price Notgeneralizable
farmers’ revenues Notgeneralizable
household expenditures Notgeneralizable
crop loss Notgeneralizable
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Reasons for impact (or inability to find impact)
• Tooshorta@metofindeffects• Problemswithtarge@ng• Didtheintendedbeneficiariesgettherelevantinforma@onattherelevant@me?
• Languageissues• Literacyissues–especiallywithSMS• Pushversuspullservice• Experienceinusingtheservice
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Causal mechanism & enabling condi<ons
• Causalmechanismsameaswithnetworkextension(differencebeingproac@vesupplyofinforma@on)• HithertoseparatemarketsconsolidatedthroughICTs
• Informa@onservicesreducedpricedispersionbutthedesiredimpactswerenotseen• Samequalifica@onsreenablingcondi@ons
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