Daily Review – 2010-11-28

  • Mobile Phones and Economic Development in Africa « Journal of Economic Perspectives – Jenny C. Aker and Isaac M. Mbiti give an overview over research on the impact of mobile phones on economic development in Africa. After outlining the spread of mobile phone technology in Africa, the identify its economic impact in five areas: Increased access to information and subsequently improved market efficiency; improved productive efficiency of firms due to better supply chain management; creation of employment opportunities in the mobile telephony sector; decreased exposure to risk due to facilitated communication among social networks in response to shocks; and mobile phone-based development projects. Finally, they outline the existing research gap in these fields.
  • Does ICT Benefit the Poor? Evidence from South Africa – Stefan Klonner and Patrick Nolen, in studying the effects of mobile phone network roll-out in rural South Africa, find a significant impact of mobile telephony on the employment market. After establishment of coverage, employment increased by 15 percent, all of which can be attributed to increased employment of women. Average household income increased significantly for those living in extreme poverty, which Klonner and Nolen interpret as network roll-out being "pro-poor". Additionally, the authors observed a strong sectoral shift away from agriculture, which solely affects men. In analysis, Klonner and Nolen argue that mobile phone network roll-out primarily improves information flows, improving spatial integration of the wage labor market.
  • Mobile Phones and Economic Development: Evidence From the Fishing Industry in India « Information Technologies & International Development – Reuben Abraham, in a study on the fishing industry in Kerala, finds that the adoption of mobile phones has decreased information asymmetries, and made markets more efficient. In particular, he finds price dispersion and volatility to have decreased, as well as market integration. However, structural constraints limit fishermen's use of optimal arbitrage, as they are often forced to sell to particular agents. Contrary to Jensen studying the same population, Abraham finds that fishermen inform each other on large shoals. Finally, he reports that market agents of the fishing industry indicate mobile telephony to be only the third-most important technological improvement for their business.
  • Das Buch als Geldbäumchen « Merkur – Kathrin Passig observes changes in her book-reading behavior caused by the emergence of the Internet. Not only does she read more and more online, but she also reads less and less books beginning-to-end, and increasingly only parts of them. Passig links this to deficits of books, such as a lack of conciseness, and projects an increasing salience of new publishing models, e.g. pay-per-chapter. Additionally, she predicts that certain kinds of books will sell worse in the future, as they are bought for primary reasons other than reading them, e.g. as gifts and status symbols.
  • Information from Markets Near and Far: Mobile Phones and Agricultural Markets in Niger « American Economic Journal: Applied Economics – Jenny C. Aker, in a study on grain markets in Niger, finds that the adoption of mobile phones has significantly decreased price dispersion across markets. The effect is stronger for market pairs with high transport costs, i.e. markets that are remote and / or connected by unpaved roads. Additionally, the study finds evidence for a network effect, in that the effect increases with growing adoption of mobile phones. Aker concludes that mobile phones impact on markets primarily by decreasing the cost of search.
  • The Digital Provide: Information (Technology), Market Performance, and Welfare in the South Indian Fisheries Sector « The Quarterly Journal of Economics – Robert Jensen, in a survey on the fishing industry of Kerala, finds that the adoption of mobile telephony by fishers and wholesalers decreased price dispersion across markets, eliminated waste, and led to near-perfect adherence to the law of one price; in total causing welfare gains for both producers and consumers of fish. Mobile phones enable fishers to search market prices, allowing them to engage in efficient arbitrage. In total, Jensen concludes, "information makes markets work, and markets improve welfare".

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