Information (Technology), Market Performance and Welfare Performance, and Welfare in The South Indian Fisheries Sector NextLab I Reading Presentation

09/17/200809/17/2008

1

Executive Summaryy

• Does ICT really matter (has a priority) in low income countries?income countries?

• Use introduction of mobile phone into Southern India as evidenceIndia as evidence ▫ A close study from 1997 to 2001 ▫ Provingg economic models and theories (90% of

the paper) • Result confirmed improvement in market

perfformance andd ciitiizen welf lfare

2

•

Study conducted in Southern India Kozhikode Kannur and KasaragodKozhikode, Kannur, and Kasaragod

• Heavy fisheries area • 15 markets 15 miles 15 markets 15 miles

apart • 300 sardine fishing

units • One market sell per

dayday • Introduction of

mobile pphone in 1997 to 2000

CalicutKozhikode

Cochin

Tuticorin

Madurai

Sri Lanka

Port Blair

Bay of BengalAndaman

Islands

Nicobar Islands

Vishakhapatnam

PondicherryChennai

Bengaluru(Bangalore)

Panaji

DeccanHyderabad

MumbaiNagpur

Bhopal KolkataBangladesh

ImphalKanpur

GangesAgra

NewDelhi

Amritsar

Srinagar

Pakistan

AFG.

Indus

KandlaAhmadabad

ArabianSea

Marmagao

LaccadiveSea70

10

20

30

70 80

30

20

10

9080

Line of actualcontrol

Indian claim

BrahmaputraHimalayas

Nepal Bhutan

Kanchenjunga

Burma

China

200 400 mi

400 km2000

0

KozhikodeRamanattukara

Villiappally

TellicherryKadirur

Koothuparamba

MattanurCannanore

Cheruthazham

Kanhangad

KasaragodSulya

MercaraKushalnagar

VirarajendrapetPonnampet

KannapuramPappinisseri

Dharmadom

NH212

NH17

NH17

NH17

Figure by MIT OpenCourseWare, using base map by US CIA.

3

The Economics Model predicts market performance and welfare improvementperformance and welfare improvement • Information enables sellers decision to not sell

on local marketon local market ▫ High VS. low density of fish zones

• Model and theorem based on Bayes-NashNashModel and theorem based on Bayesequilibrium game theory

• Linear reggression ppredictingg the effect

4

•

Results matches ppredictions

• Lower in overall fish price (4% lower) • Lower price dispersion within and between Lower price dispersion within and between

markets (from 70% to 15%) • Eliminate waste (from 5Eliminate waste (from 5-8%)8%) • Consumer and producer surplus increase

5

b

Alternative explanations are disproved

• Explanations such as: ▫▫ Mobile phones lead to increase in wealth in those Mobile phones lead to increase in wealth in those

area of coverage ▫ Mobile pphones effect transaction timingg 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 generating a well functioning market and should be prioritize

• Practice can be repeated elsewhere especially in Practice can be repeated elsewhere especially in perishable commodities sector

• Information available from ICT developpmentenforce economic theorem▫ Law of One Price ▫ Welfare Effect

7

MIT OpenCourseWarehttp://ocw.mit.edu

MAS.965 / 6.976 / EC.S06 NextLab I: Designing Mobile Technologies for the Next Billion UsersFall 2008

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