nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2011‒05‒24
two papers chosen by
Walter Frisch
University Vienna

  1. Information and Firmsâ Search Behavior By Aker, Jenny; Tack, Jesse
  2. The Impact of Broadband on U.S. Agriculture: An Evaluation of the USDA Broadband Loan Program By Kandilov, Amy M.G.; Kandilov, Ivan T.; Liu, Xiangping; Renkow, Mitch

  1. By: Aker, Jenny; Tack, Jesse
    Abstract: Information and communications technologies (ICTs) have spread rapidly over the past decade. There has been considerable interest in the effect of such technology on search costs, search behavior and welfare outcomes, particularly in developing countries. This paper investigates the impact of a new search technology, mobile phones, on tradersâ search and marketing behavior in Niger. We construct a novel theoretical model of sequential search, in which traders engage in optimal search for the maximum sales price, net transport costs. The model predicts that the introduction of a new search technology, such as mobile telephones, will increase tradersâ reservation sales prices and the number of markets over which they search. To test the predictions of the theoretical model, we use a unique market and trader panel dataset from Niger. We show that the duration of mobile phone coverage increases the number of markets over which traders search and their number of market contacts. This result increases nonlinearly in the duration of mobile phone coverage in a particular market, suggesting that the relationship between mobile phone coverage and tradersâ search behavior is convex with larger effects accruing over time. This effect is also stronger for larger traders â namely those who trade over longer distances â but does not appear to have differential effects by gender, age, road quality or market size. These results provide important empirical evidence for search theoretic models that assume the existence of a causal link between search costs and search behavior and suggest potential welfare improvements.
    Keywords: Africa, Information, Information Technology, Search Costs, Niger, Agricultural and Food Policy, Food Security and Poverty, International Development, Marketing, O1, O3, Q13,
    Date: 2011
  2. By: Kandilov, Amy M.G.; Kandilov, Ivan T.; Liu, Xiangping; Renkow, Mitch
    Abstract: We evaluate the impact of USDAâs low-cost broadband loan programs on the U.S. agricultural sector. The broadband loan programs increase access to high-speed internet in recipient communities, which can raise farm sales by increasing both farm output and prices received by producers. Further, high-speed internet may drive down costs by providing information on cheaper inputs and better management practices, leading to an overall improvement in farm profits. Using data from the 1997, 2002, and 2007 U.S. Census of Agriculture, we employ a panel difference-in-differences estimator, as well as a difference-in-differences propensity score matching estimator, to show that the two USDA broadband loan programs have positive impacts on farm sales, expenditure, and profits. The positive effects for crops are larger than those for livestock and animal products.
    Keywords: Broadband loans, program evaluation, farm sales, expenditure, and income, Agricultural and Food Policy, Farm Management, Marketing, Public Economics, Q10,
    Date: 2011

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