This Paper seeks to assess the impact of improved information accessibility on market performance and labor household decisions in Peruvian agricultural communities. The author highlights the roll of telecommunication technologies in the construction of efficient and effective markets by overcoming barriers that both reduce costs and save time. In order to develop on the assumptions made, the author recurs to the examination of a national program aimed at providing public phones in rural areas (FIFTEL). The data was obtained in the Peruvian National Household Survey, FIFTEL program information, and NASA topographic data. Furthermore, the data is analyzed while conclusions are made based on a series of regressions derived from Marshallian demand equations and Bernoulli utility functions.
The paper is organized as follows. After a brief introduction, section two presents a description of the FIFTEL program. Afterwards, section three presents an analytical framework to understand the expected economic development potential. Subsequently, on a fourth chapter the dataset used for the empirical analysis is presented, whilst section five describes the empirical approach adopted in the analysis. Section six discusses the main results, whereas section seven confirms the robustness of the results. Finally, section eight delivers the conclusions.
The author concludes that:
providing public phones in 2,453 Peruvian villages generated increases of 16% in the perceived value for each kilogram of agricultural production
the access to public phones brought a 23.7% reduction of agricultural costs
the reduction in costs and the increase in perceived value, led to an increase of 19.5% in agricultural profitability
income shocks translated into a reduction in the incidence of child (6 – 13 years old) market work equivalent to 13.7 percentage points and a reduction in child agricultural work of 9.2 percentage points
a dominant income effect is present in the use of child labor, a key fact in the reduction of child labor and promotion of education