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Mobile Phones and Mozambique Farmers: Less Asymmetric Information and More Trader Competition?

Wouter Zant ()

No 18-055/V, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We investigate the impact of search costs of farmers and traders on prices, by measuring to what extent the introduction of mobile phones in Mozambique has affected the margin between recorded maize producer prices and retail market prices, and by exploring who benefits from possible margin changes. Estimations are based on weekly producer and retail market prices of white maize grain, from July 1997 to December 2009, for 15 major producer markets in Mozambique. We find a margin increase varying from 4.5% to 9.6%, supporting a bias of benefits towards traders. Hence, not less asymmetric information and more trader competition, but rather the reverse. Estimation results are robust for non-random rollout of the mobile phone network and various other threats. Impacts can be traced towards improved information on terminal market prices and are also significantly correlated with network density. Household survey data yield a mostly insignificant impact for farmers, consistent with the key result of this study. Several farmer characteristics are in line with lower farmer benefits.

Keywords: search costs; transport costs; mobile phones; agricultural markets; maize prices; Mozambique; sub-Sahara Africa (search for similar items in EconPapers)
JEL-codes: O13 O33 Q11 Q13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr, nep-com, nep-ict and nep-pay
Date: 2018-06-15, Revised 2019-01-11
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