Price Information, Inter-Village Networks, and 'Bargaining Spillovers': Experimental Evidence from Ghana

Abstract

Through a randomized experiment and detailed data on communications among farmers, we identify the impact of text-messages-based commodity price information on rural farmers. For yam, a crop with high prevalence of bargaining between traders and farmers, the intervention leads to a 9% increase in the prices received by farmers in the treatment group and to substantial indirect benefits for control group farmers with strong marketing ties to the treated group. As these control farmers do not gain price information, we speculate that the spillovers might be driven by bargaining spillovers, and capture this intuition in a formal model. The intervention has no impact on other crops grown in the area, which are characterized by different market structure and lower incidence of bargaining. The results expand our understanding of the mar- ket structure characteristics that make ICT interventions effective and highlight the importance of accounting for longer-run inter-village spillover effects.

Keywords: Price Information, Agriculture, Bargaining, ICTs, Networks, Externalities

JEL Classification: D82, O13, Q11, Q12, Q13