Radio Frequency (Un)Identification: Results from a Proof-of-Concept Trial of the Use of RFID Technology to Measure Microenterprise Turnover in Sri Lanka

44 Pages Posted: 20 Apr 2016

See all articles by Suresh de Mel

Suresh de Mel

University of Peradeniya

Dammika Herath

Kandy Consulting Group

David J. McKenzie

World Bank - Development Research Group (DECRG); IZA Institute of Labor Economics

Yuvraj Pathak

Graduated from Masters Program ; Consultant, Research Group

Multiple version iconThere are 2 versions of this paper

Date Written: October 1, 2014

Abstract

Accurate measurement of stock levels, turnover, and profitability in microenterprises in developing countries is difficult because the majority of these firms do not keep detailed records. This paper tests the use of radio frequency identification tags as a means of objectively measuring stock levels and stock flow in small retail firms in Sri Lanka. In principle, the tags offer the potential to track stock movements accurately. The paper compares the stock counts obtained from RFID reads to physical stock counts and to survey responses. There are three main findings. First, current RFID-technology is more difficult to use, and more time-consuming to employ, than had been envisaged. Second, the technology works reasonably well for paper products, but very poorly for most products sold by microenterprises: on average only about one-quarter of the products tagged could be read and there was considerable day-to-day variation in read-efficiency. Third, a comparison of survey responses and physical stock-takes shows much higher accuracy for survey measures. As a result, the study concludes that this technology is currently unsuitable for improving stock measurement in microenterprises, except perhaps for a few products.

Keywords: Policy Formulation and Assessment (superceded), Cottage Industry, Public Sector Administrative & Civil Service Reform, Public Sector Regulation, Democratic Government, Microenterprises, Public Sector Administrative and Civil Service Reform, Organizational Management, De Facto Governments

Suggested Citation

de Mel, Suresh and Herath, Dammika and McKenzie, David John and Pathak, Yuvraj, Radio Frequency (Un)Identification: Results from a Proof-of-Concept Trial of the Use of RFID Technology to Measure Microenterprise Turnover in Sri Lanka (October 1, 2014). World Bank Policy Research Working Paper No. 7064, Available at SSRN: https://ssrn.com/abstract=2513120

Suresh De Mel (Contact Author)

University of Peradeniya ( email )

University of Peradeniya
Dept of Economics & Statistics
Peradeniya
Sri Lanka
+94 81 2392622 (Phone)

Dammika Herath

Kandy Consulting Group

Sri Lanka

David John McKenzie

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Yuvraj Pathak

Graduated from Masters Program ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Consultant, Research Group ( email )

United States

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