Does Digital Divide or Provide? The Impact of Cell Phones on Grain Markets in Niger

64 Pages Posted: 19 Feb 2008 Last revised: 19 Jun 2014

Jenny C. Aker

Tufts University - The Fletcher School of Law and Diplomacy; Center for Global Development

Date Written: October 1, 2008

Abstract

Cell phones are quickly transforming markets in low-income countries. The effect is particularly dramatic in rural areas of sub-Saharan Africa, where cell phones often represent the first telecommunications infrastructure. Niger had approximately 2 landlines for every 1,000 people when mobile phones were first introduced in 2001. Since that time, mobile phone coverage has increased significantly throughout the country, with over 78 percent of markets covered by 2007.

This working paper assesses the impact of mobile phones on grain market performance in one of the world's poorest countries. Aker finds that the introduction of mobile phones is associated with a 20-percent reduction in grain price differences across markets, with a larger impact for markets that are farther apart and those that are linked by poor-quality roads. Cell phones also have a larger impact over time: as more markets have cell phone coverage, the greater the reduction in price differences. This is primarily due to changes in grain traders' marketing behavior: cell phones lead to reduced search costs, more market information and increased efficiency in moving goods across the country.

Aker concludes by outlining the ways in which information technology can be used as an effective poverty-reduction strategy in low-income countries.

Keywords: Niger, West Africa, markets, technology, cell phones, Africa, Information, Information Technology, Market Performance, Search Costs, Niger

Suggested Citation

Aker, Jenny C., Does Digital Divide or Provide? The Impact of Cell Phones on Grain Markets in Niger (October 1, 2008). Center for Global Development Working Paper No. 154. Available at SSRN: https://ssrn.com/abstract=1093374 or http://dx.doi.org/10.2139/ssrn.1093374

Jenny C. Aker (Contact Author)

Tufts University - The Fletcher School of Law and Diplomacy ( email )

Medford, MA 02155
United States

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

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