Does Digital Divide or Provide? The Impact of Cell Phones on Grain Markets in Niger
Jenny C. Aker
Tufts University - The Fletcher School of Law and Diplomacy; Center for Global Development
October 1, 2008
Center for Global Development Working Paper No. 154
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.
Number of Pages in PDF File: 64
Keywords: Niger, West Africa, markets, technology, cell phones, Africa, Information, Information Technology, Market Performance, Search Costs, Niger
Date posted: February 19, 2008 ; Last revised: June 19, 2014