A special report on telecoms in emerging markets: : Eureka moments | The Economist

A special report on telecoms in emerging markets: : Eureka moments | The Economist

In the past few years the anecdotal evidence has been backed up by studies that measure the economic impact of mobile phones directly. One example is the analysis of fish prices on the coast of Kerala, in southern India, carried out in 2007 by Robert Jensen, an economist at Harvard University. By examining historical price data as mobile-phone coverage was extended down the coast between 1997 and 2001, Mr Jensen was able to show that access to mobile phones made markets much more efficient. Fishermen could call several markets while still at sea before deciding where to sell instead of taking their catch back to their home market and throwing it away if there were no buyers for it. This eliminated waste, dramatically reduced the variation in prices along the coast, brought down consumer prices by 4% and increased fishermen’s profits by 8%. Mobile phones paid for themselves within two months. Mr Jensen concluded that “information makes markets work, and markets improve welfare.”