Mobile Phone Coverage and Producer Markets : Evidence from West Africa

Mobile phone coverage has expanded
considerably throughout the developing world, particularly
within sub-Saharan Africa. Existing evidence suggests that
increased access to information technology has improved
agricultural market efficiency for consumer markets and
certain commodities, but there is less evidence of its
impact on producer markets. Building on the work of Aker
(2010), this paper estimates the impact of mobile phone
coverage on producer price dispersion for three commodities
in Niger. The results suggest that mobile phone coverage
reduces spatial producer price dispersion by 6 percent for
cowpea, a semi-perishable commodity. These effects are
strongest for remote markets and during certain periods of
the year. The introduction of mobile phone coverage has no
effect on producer price dispersion for millet and sorghum,
two staple grains that are less perishable and are commonly
stored by farmers. There are no impacts of mobile phone
coverage on traders' gross margins or producer price
levels, but mobile phone coverage is associated with a
reduction in the intra-annual price variation for cowpea.
These results are potentially explained by the fact that
farmers engage in greater storage for storable commodities
such as millet and sorghum.