Price Information, Inter-Village Networks and 'Bargaining Spillovers'
PRICE INFORMATION, INTER-VILLAGE NETWORKS, AND \BARGAINING SPILLOVERS": EXPERIMENTAL EVIDENCE FROM GHANA∗ Nicole Hildebrandt Yaw Nyarko Giorgia Romagnoli Emilia Soldani September 7, 2015 Abstract We conducted a randomized field experiment to determine the impact of providing rural farmers with commodity price information delivered via text messages on their mobile phones. Using a novel index of inter-village communication networks, we show that the intervention: (1) had a sustained positive impact on the prices received by treatment group farmers, and (2) had substantial indirect benefits on the prices received by certain control group farmers. We discuss a novel mechanism of bargaining spillovers which can explain the rise of such positive external- ities, even in the absence of information sharing between the treatment and the control groups. After accounting for spillovers, we estimate that the price alerts led to a 9% increase in prices for the treatment group and for some control farmers who, we argue, benefited from bargaining spillovers. Accounting for spillovers is crucial because otherwise the longer-run estimates would be biased and one could erroneously conclude that the intervention had no long-run benefit for farmers. The direct return on investment of the service exceeds 200%, a result that underscores the huge potential of ICT interventions in emerging markets. JEL Codes: D82, O13, Q11, Q12, Q13. Keywords: Price information, Agriculture, Bargaining, ICTs, Networks, Externalities. ∗New York University, NYU Abu Dhabi and CTED (Center for Technology and Economic Development). We are extremely grateful to NYU-Abu Dhabi Institute, as well as anonymous donors, for generous financial funding, without which this project could not have taken place.
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