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Study Overview

The Role of Price Information in Agricultural Markets: Experimental Evidence from Rural Peru
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I present new experimental evidence on the role of price information in agricultural markets. For this purpose, I set up an RCT in the central highlands of Peru. A group of farmers in randomly selected villages was provided with mobile phones where they received detailed price information for the most relevant local crops in six regional markets through SMS. Through some service restrictions, I made sure that these mobile phones were only used as means to convey this price information. The intervention took place after their planting decisions had already been made, and the information was sent throughout the period where they sell most of their production. This enables me to capture the sole impact of information on marketing outcomes (isolated from any productive incentives). I investigate if households with information were able to get better prices for their crops, increase their market participation and change their sales volumes. I also investigate the possibility of information spillovers by examining marketing outcomes of households who did not receive the information, but lived in villages where others did.
Agriculture and Rural Development
Information and Communications Technology
Private Sector Development
Urban Development
Additional Keywords:
Price information, information diffusion, information spillover.
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Principal Investigator(s)

Name of First PI:
Eduardo Nakasone
International Food Policy Research Institute (IFPRI)
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Intervention Overview

I conducted a field experiment in the central highlands of Peru where I randomly allocated price information among agricultural households in 58 villages. Twenty six villages were assigned to the treatment group, while the others remained as controls. Within villages in the treatment group, I randomly provided cell phones to around 111 households. I collected detailed price information for seventeen different crops by quality in six different relevant markets. Those who received cell phones were sent price information through SMS for four months, immediately after the rainy season in the highlands. This is the period in which farmers have already harvested their crops and make most of their sales decisions. To make information more digestible, farmers only received information for the crops they harvested. To avoid other mobile benefits, the devices provided to farmers had an important service restriction. At least for the duration of the intervention, these devices were only able to receive SMS and calls from a phone number managed by the project. Participants were able to keep the devices as pre-paid phones with no further obligation after this period.
Theory of Change:
Multiple Treatment Arms Evaluated?

Intervention Timing

Intervention or Program Started at time of Registration?
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Evaluation Method

Evaluation Method Overview

Primary (or First) Evaluation Method:
Randomized control trial
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Method Details

Details of Evaluation Approach:
The results of the paper are based on an Intention-to-Treat (ITT) Approach. I estimate difference-in-difference regressions for prices, market participation and sales quantities. Regressions include crop and quality controls and random effects (to account for the fact that error terms from the same household are not independent from one another).
Outcomes (Endpoints):
Primary outcomes: Sales Prices, Market Participation. Secondary Outcomes: Sales quantities, willingness to pay for the SMS service. Heterogeneous treatment effects by types of crop, risk aversion and previous mobile ownership.
Unit of Analysis:
The analysis is performed at the household - crop - period level.
I test two main hypotheses. First, I analyze the causal effect of farmers' access to market price information on their sales prices. For this purpose, I compare the prices of the beneficiaries who directly received the price information through their cell phones with those of households in the control villages. Second, I investigate if there are any spillover effects of information. To examine this possibility, I investigate the marketing outcomes of households who did not receive any price SMS, but lived in villages where others did. The idea is that those in this group might have been exposed indirectly to the price information, even when they did not receive it directly. I also test for heterogeneous treatment effects by types of crop, risk aversion and previous mobile ownership.
Unit of Intervention or Assignment:
Number of Clusters in Sample:
58 villages
Number of Individuals in Sample:
790 households
Size of Treatment, Control, or Comparison Subsamples:
Assignment by village: 26 villages in the treatment (410 HHs) and 32 in the control group (380 HHs). Among households in treatment villages, 111 received price information through SMS and 299 did not.

Outcomes Data

Household surveys.
Data Already Collected?
Data Previously Used?
Data Access:
Restricted -- Access requires a formal approval process
Data Obtained by the Study Researchers?
Data Approval Process:
Data collected by author.
Approval Status:
Yes-obtained approval and have received the data

Treatment Assignment Data

Participation or Assignment Information:
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Data Analysis

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Study Materials

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Registration Category

Registration Category:
Non-Prospective, Category 4: Data for measuring impacts have been obtained/collected by the research team and analysis for this evaluation has started

Completion Overview

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Preliminary Report:
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Data Availability

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Other Materials

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Description of Changes:

Study Stopped