NOVAFRICA Seminar:
“Price Information, Inter-village Networks and ‘Bargaining Spillovers’: Experimental evidence from Ghana”

On Wednesday, May 9th, at 2.30pm, the NOVAFRICA Center welcomes Giorgia Romagnoli, from University of Amsterdam, to present her work.

Author:
Giorgia Romagnoli (University of Amsterdam)

Abstract:
We conducted a randomized field experiment to determine the impact of providing rural farmers with commodity price information delivered via text messages on their mobile phones. Using a novel index of inter-village communication networks, we show that the intervention: (1) led to a sustained positive increase of about 9% in the prices received by treatment group farmers, and (2) had substantial indirect benefits on the prices received by certain control group farmers. We discuss a novel mechanism of bargaining spillovers which can explain the rise of such positive externalities, even in the absence of information sharing between the treatment and the control groups. Accounting for spillovers is crucial because otherwise the longer-run estimates would be biased and one could erroneously conclude that the intervention had no long-run benefit for farmers. The direct return on investment of the service exceeds 200%, a result that underscores the huge potential of ICT interventions in emerging markets.

Find more information about this seminar here.