Information (Technology), Market
Performance and Welfare
Performance,
in The South Indian Fisheries Sector
NextLab I Reading Presentation
09/17/2008
1
Executive Summaryy
• Does ICT really matter (has a priority) in low income countries?
countries?
• Use introduction of mobile phone into Southern
India as evidence
▫ A close study from 1997 to 2001
▫ Proving
g economic models and theories (90% of
the paper)
• Result confirmed improvement in market perfformance and
d ciitiizen welf
lfare
2
Study conducted in Southern India
Kozhikode Kannur,
Kozhikode,
Kannur and Kasaragod
• Heavy fisheries area
• 15 markets 15 miles
apart
• 300 sardine fishing
units
• One market sell per
day
• Introduction of
mobile phone in
1997 to 2000
Sulya
NH
17
Kasaragod
Mercara
Kushalnagar
Kanhangad
Virarajendrapet
Ponnampet
NH
17
Cheruthazham
AFG.
80
In
Cannanore Koothuparamba
Dharmadom Kadirur
Tellicherry
30
Hi
Amritsar
Pakistan
ma
New
Delhi
Villiappally
Kandla
Ahmadabad
NH
212
Kozhikode
Ramanattukara
lay
as
Ne
Kanpur
Agra
NH
17
0
Indian claim
Bhopal
pal
200
0
Line of actual
control
Srinagar
s
Mattanur
70
du
Kannapuram
Pappinisseri
400 km
200
China
30
Brahmaputra
Kanchenjunga
Bhutan
Ganges
Imphal
Bangladesh
Kolkata
Burma
Nagpur
20
400 mi
20
Mumbai
Arabian
Sea
Deccan
Hyderabad
Panaji
Marmagao
Bengaluru
(Bangalore)
Vishakhapatnam
Bay of Bengal
Chennai
Calicut
Pondicherry
10
Madurai
Cochin
Laccadive
Sri Lanka
Sea
70
Tuticorin 80
Kozhikode
Andaman
Islands
Port Blair
10
Nicobar Islands
90
Figure by MIT OpenCourseWare, using base map by US CIA.
3
The Economics Model predicts market performance and welfare improvement
improvement
• Information enables sellers decision to not sell
on local market
▫ High VS. low density of fish zones
• Model and theorem based on Bayes
Bayes-Nash
Nash
equilibrium game theory
• Linear reg
gression predicting
g the effect
4
Results matches predictions
• Lower in overall fish price (4% lower)
• Lower price dispersion within and between markets (from 70% to 15%)
• Eliminate waste (from 5-8%)
5 8%)
• Consumer and producer surplus increase
5
Alternative explanations are disproved
• Explanations such as:
▫ Mobile phones lead to increase in wealth in those
area of coverage
▫ Mobile
b phones effect transaction timing
g and
create collusion
▫ Entry and exit changes overtime
6
Summaryy
• ICT adds benefit to low-income region by
generating a well functioning market and should
be prioritize
• Practice can be repeated elsewhere especially in perishable commodities sector
• Information available from ICT develop
pment
enforce economic theorem
▫ Law of One Price
▫ Welfare Effect
7
MIT OpenCourseWare
http://ocw.mit.edu
MAS.965 / 6.976 / EC.S06 NextLab I: Designing Mobile Technologies for the Next Billion Users
Fall 2008
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