Date of Graduation

5-2012

Level of Access

Open Access

Degree Name

Bachelor of Arts

Department or Program

Economics

Number of Pages

78

Abstract

Classical theory suggests that economies operate efficiently when agents have open and symmetric access to market information such as the price, quality, and availability of goods and services. Emerging economies often lack the infrastructure and institutional framework necessary to facilitate this fluid transmission of information, and are subsequently defined by informational divides that sustain systemic structural impediments to development. The recent proliferation of mobile telephone services in the developing world, however, has created new possibilities for information-sharing among the globe’s poorest populations, and has introduced the potential for development that is both economically sustainable and inherently “bottom up.”

This paper considers the role of mobile telephony for development through an empirical examination of agricultural markets in one of the world’s poorest countries—Mozambique. Using established methods of analysis in conjunction with a novel geospatial approach, we find that while the introduction of cellular technology has a discernible impact on agricultural price behavior in our sample, the overall the estimated effect of mobiles falls short of our expectations. This study therefore draws upon an alternative theory on price dispersion and connects it with the current empirical research on mobiles phones for development. In total, we conclude that while mobiles are an influential force in Mozambique’s staple food markets, additional constraints such as trade discontinuities between markets are the primary source of persistent price dispersion and inefficiency.

This paper considers the role of mobile telephony for development through an empirical examination of agricultural markets in one of the world’s poorest countries—Mozambique. Using established methods of analysis in conjunction with a novel geospatial approach, we find that while the introduction of cellular technology has a discernible impact on agricultural price behavior in our sample, the overall the estimated effect of mobiles falls short of our expectations. This study therefore draws upon an alternative theory on price dispersion and connects it with the current empirical research on mobiles phones for development. In total, we conclude that while mobiles are an influential force in Mozambique’s staple food markets, additional constraints such as trade discontinuities between markets are the primary source of persistent price dispersion and inefficiency.

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