Does Privatization Deliver? Access to Telephone Services and Household Income in Poor Rural Areas Using a Quasi-Natural Experiment in Peru

30 Pages Posted: 25 Apr 2011

See all articles by Alberto Chong

Alberto Chong

University of Ottawa

Virgilio Galdo

Michigan State University - Economics

Maximo Torero

International Food Policy Research Institute (IFPRI); International Food Policy Research Institute (IFPRI)

Date Written: December 2005

Abstract

This paper takes advantage of a quasi-natural experiment in Peru by which the privatized telecommunications company was required by government to randomly install and operate public pay phones in small rural towns throughout the national territory. Using a specially designed household survey for a representative sample of rural towns, it is possible to link access to telephone services with household income. It was found that, regardless of the income measurement, most characteristics of public telephone usage are positively linked with income. Remarkably, the benefits occur at both non-farm and farm income levels. Not only do the findings hold when using instrumental variables, but they are also further confirmed when using propensity scores matching methods.

Suggested Citation

Chong, Alberto and Galdo, Virgilio and Torero, Maximo and Torero, Maximo, Does Privatization Deliver? Access to Telephone Services and Household Income in Poor Rural Areas Using a Quasi-Natural Experiment in Peru (December 2005). IDB Working Paper No. 446, Available at SSRN: https://ssrn.com/abstract=1818735 or http://dx.doi.org/10.2139/ssrn.1818735

Alberto Chong (Contact Author)

University of Ottawa ( email )

2292 Edwin Crescent
Ottawa, Ontario K2C 1H7
Canada

Virgilio Galdo

Michigan State University - Economics ( email )

Agriculture Hall
East Lansing, MI 48824-1122
United States
517-203-8372 (Phone)

HOME PAGE: http://search.msu.edu/people/index.php?uid=488171&prev=Galdo,%20Virgilio

Maximo Torero

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

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