Last week's issue of The Economist contains an interesting case study article outlining how mobile telephony has changed (for the better) the efficiency of local fish markets in one province in India.
As phone coverage spread between 1997 and 2000, fishermen started to buy phones and use them to call coastal markets while still at sea. (The area of coverage reaches 20-25km off the coast.) Instead of selling their fish at beach auctions, the fishermen would call around to find the best price...
Once mobile phones were in common usage:
...no fish were wasted and the variation in prices fell dramatically... Waste had been eliminated and the “law of one price”—the idea that in an efficient market identical goods should cost the same—had come into effect, in the form of a single rate for sardines along the coast... Fishermen's profits rose by 8% on average and consumer prices fell by 4% on average. Higher profits meant the phones typically paid for themselves within two months.
In busy, technologically advanced nations where, it seems, that half the drivers on the road engage in the unsafe practice of phoning while driving, it's easy to forget that travel and communication can sometimes be substitutes for one another. The authors note that mobile phones can:
...make up for poor infrastructure by substituting for travel, allow[ing] price data to be distributed and enabl[ing] traders to engage with wider markets.
Interesting Art,
From Kerala to Wall Street, the ROI for wireless communications is hard to quantify. Does a blackberry really make you more efficient, or just distracted?
The fish story seems hard to refute though... especially if the fish would be wasted otherwise.
Posted by: Adam Zawel | 15 May 2007 at 09:32 AM