Is IT Enough? Evidence from a Natural Experiment in India's Agriculture Markets

36 Pages Posted: 14 Nov 2013 Last revised: 15 May 2015

See all articles by Chris Parker

Chris Parker

American University - Kogod School of Business

Kamalini Ramdas

London Business School - Department of Management Science and Operations

Nicos Savva

London Business School

Date Written: May 12, 2015

Abstract

Access to information and communication technologies (ICTs) such as mobile phone networks is widely known to improve market efficiency. In this paper, we examine whether access to timely and accurate information provided through ICT applications has any additional impact. Using a detailed dataset from Reuters Market Light (RML), a text message service in India that provides daily price information to market participants, we find that this information reduces the geographic price dispersion of crops in rural communities by an average of 12%, over and above access to mobile phone technology and other means of communication. To identify the effect of information on price dispersion we exploit a natural experiment where bulk text messages were banned unexpectedly across India for 12 days in 2010. We find that besides reducing geographic price dispersion, RML also increases the rate at which prices converge across India over time. We discuss the implications of this for development organizations and information providers.

Keywords: price dispersion, information and communication technology, natural experiment, agriculture supply chains

Suggested Citation

Parker, Chris and Ramdas, Kamalini and Savva, Nicos, Is IT Enough? Evidence from a Natural Experiment in India's Agriculture Markets (May 12, 2015). Available at SSRN: https://ssrn.com/abstract=2353771 or http://dx.doi.org/10.2139/ssrn.2353771

Chris Parker

American University - Kogod School of Business ( email )

4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States

Kamalini Ramdas (Contact Author)

London Business School - Department of Management Science and Operations ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Nicos Savva

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

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