Cellphones & Development — Evidence, not anecdotes

There's plenty of anecdotes about mobile phones helping poor people in emerging markets.  There's also evidence that I've written about several times in the past.  Here's another piece of evidence.

Robert Jensen studied the adoption of cellphones by fishermen along the coast of India's Kerala state between 1997 and 2001 measuring the resulting impact on fish markets, prices, incomes and waste. Cellphone service became available in three distinct stages (January 1997, July 1998 and May 2000) for three distinct regions south to north along the coast.  This helped Jensen separate cell phone adoption from other effects.

His work was presented at the Seventh Annual NBER-NCAER Neemrana Conference at India's Neemrana Fort Palace Resort in Rajasthan over a year ago (January 15-17, 2006) but I only stumbled on it today, thanks to a reference by Ajay Shah which lead me to this Times of India story and then to Robert Jensen's actual slides from last year's conference.

The short summary — cellphones improve information flow, which makes markets work better and results in quantifiable benefits for all parties.  Waste (~6% of the fish were unsold before cell phones) has been eliminated. Fishermen profits are up 8% and consumer prices are down 4%, directly driving a 20 rupee/person/month consumer surplus, the equivalent of a 2% increase in per-capita GDP from this one market alone.

Here's are plots of daily fish prices at coastal markets spaced roughly 10 Km apart.  The three graphs cover markets in the three regions and give a good sense of both the impact and the speed of the transition.

Jensen concludes his talk by pointing out other impacts, beyond the price of fish.  The advent of cellphones also led to a 6% increase in educational enrollments and a 5% increase in the probability of using of healthcare when sick.  All this with no government programs, no new funding requirements.

Comments

[alpha barry]

I was reading your assessment on the mobile phone companies in Guinea. As a consumer of mobile phone, I'm curious to know as for why phone companies in Guinea have failed to introduce a voice message system for their growing clientele? I thought you may know the answer to this question especially that you have done some study on them. By the way, I'm from Sierra Leone, and we do have a voice message system offered by some companies. I get annoy whenever I call Conakry and unable to leave a voice message.

Thanks for your reply,
AB

[brough]

I'm sorry, I don't know. Operators deploy voice mail because it increases total traffic and makes them more money, i.e.:
A calls B, but gets voice mail and leaves a message
B call voice mail and listens to message
B calls A
Thats three completed (billable) phone calls instead of one unanswered call (not billable)! Typically voice mail equipment is not expensive (thus rapid payback on the money spent), so not deploying voice mail, or making it hard or expensive to access, doesn't make sense to me.