Access to Mobile Phone Technology and its Effects on Livestock Markets Linkages in the Pastoral Drylands of Kenya

Abstract

Market information plays an important role in the functioning of markets. The recurrence of market information asymmetry and associated market failure has been a challenge in developing nations. Many scholars argue that the current age of improved information and communication technologies, especially the ubiquity of mobile phones, would reduce the information asymmetry gap. Therefore, this study focused on evaluating whether mobile phones have impacted livestock marketing in the pastoral drylands of Kenya a context traditionally characterized by high information asymmetry. The first specific objective investigated market integration for 6 purposively selected livestock markets for 43 weeks (2019-2020) using weekly livestock market prices to get insights on the regional scale. The Vector Error Correction Model framework was used to estimate the short and long-run market price causal relationships. The results indicate that a higher proportion of price variation in larger markets in the region was due to its shocks while variation in smaller markets originated from the larger markets. Price transmission was also evident between markets operating in different trading routes. However, markets located close to production catchments exhibited lower price trends despite being connected. These results suggest a strong influence of the recent infrastructural investments on price transmission between markets in the region. The second specific objective used 11 years panel (2009-2020) data of 924 households to evaluate the impact of mobile-phone access duration on market participation dynamics. It leverages the expansive geography of the study area and the temporal heterogeneity across space in setting up network towers by telecommunication companies, to instrument the duration of access to mobile phones among different subsamples at sublocation levels. A panel-data Ordered Tobit model that accounts for sequential decision-making on the discrete and continuous market participation outcomes was used for analysis. The findings show variation in impact of increased duration contingent on distance to the main market in the region. The results encourage tailored investments that increase the competitiveness of markets near production catchments and those that support the building of herds. The third specific objective examined whether access to information created by processing the submitted data could be used as a no-cost incentive to increase participation in crowdsourcing for livestock market information. To do so, a randomized provision of information on average prices from surrounding livestock markets to contributors of a micro-tasking platform called KAZNET was conducted for nineteen weeks. The main value offered by the treatment was that contributors could easily track livestock market prices from the main markets in the region. A difference-in-difference identification strategy was used to estimate the treatment effects. The treatment increased participation in livestock marketing tasks as well as in other tasks that were unrelated to the information treatment. The findings show that a crowdsourcing model that generates information that is valuable to its contributors and can be used to improve participation and increase the value of the data generated. These results also show that micro-tasking coupled with providing access to timely information could improve the sustainability of data collection and dissemination efforts in rural settings.