robert fitzgerald, phd

Writing in The Quarterly Journal of Economics, Professor Robert Jensen from the John F. Kennedy School of Government at Harvard University, reports on a project in Southern India where fishermen and wholesalers are using mobile phones to address limitations in the market information system. From his economic analysis of data collected over a five year period he concludes that the use of mobile phones worked to reduce price dispersion and increase fisherman's profits. In his paper he reinforces the idea that access to timely information is vital to the effective operation of markets and the benefits can be seen for both producers and traders. The abstract of "The Digital Provide: Information (Technology), Market Performance, and Welfare in the South Indian Fisheries Sector" follows:

"When information is limited or costly, agents are unable to engage in optimal arbitrage. Excess price dispersion across markets can arise, and goods may not be allocated efficiently. In this setting, information technologies may improve market performance and increase welfare. Between 1997 and 2001, mobile phone service was introduced throughout Kerala, a state in India with a large fishing industry. Using microlevel survey data, we show that the adoption of mobile phones by fishermen and wholesalers was associated with a dramatic reduction in price dispersion, the complete elimination of waste, and near-perfect adherence to the Law of One Price. Both consumer and producer welfare increased."