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

Authors: Chris Parker, Kamalini Ramdas, Nicos SavvaAuthors Info & Claims

Management Science, Volume 62, Issue 9

Pages 2481 - 2503

https://doi.org/10.1287/mnsc.2015.2270

Published: 01 September 2016 Publication History

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 data set 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.

This paper was accepted by Lorin Hitt, information systems.

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Index Terms

Is IT Enough? Evidence from a Natural Experiment in India’s Agriculture Markets
1. Applied computing
  1. Enterprise computing
  2. Law, social and behavioral sciences

Index terms have been assigned to the content through auto-classification.

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Published In

cover image Management Science

Management Science Volume 62, Issue 9

September 2016

312 pages

ISSN:0025-1909

DOI:10.1287/mnsc.2016.62.issue-9

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Copyright © 2016, INFORMS.

Publisher

INFORMS

Linthicum, MD, United States

Publication History

Published: 01 September 2016

Accepted: 10 May 2015

Received: 22 July 2012

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