This document discusses pathways by which improved market information can affect market performance and implications for evaluating the impacts of market information systems (MIS). It summarizes that: 1) MIS can directly impact private actors' decisions around spatial arbitrage, production, and pricing, but indirectly impact markets through complementarity with other infrastructure and improved policies. 2) Evaluating direct impacts is more straightforward but attributing indirect impacts to MIS is difficult due to other contemporaneous factors. 3) While conceptual links exist between better information and market outcomes, private investment alone may not sufficiently provide information due to issues like indivisibility, non-excludability, and uncertainty.

1. Pathways by Which Improved
Information Can Affect Market
Performance: Implications for
Evaluation of MIS Impacts
John Staatz
Michigan State University
Workshop on Agricultural Market Information Systems
in Africa: Renewal & Impact
Montpellier, France, 29 31 March 2010
29-31
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2. Key messages
Complementarity between public and
private activities to improve market
information
MIS can improve market performance both
through
Direct impacts on decisions of private actors:
Spatial and temporal arbitrage
Production decisions
P d ti d i i
Indirect effects via:
Complementarity with other hard and soft
infrastructure (
f (e.g., roads, credit programs),
d d )
Impacts on improving government policies
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3. Key messages
Yet as one moves towards these more round-
about impacts of MIS, it becomes increasingly
difficult to
diffi lt t quantify th i
tif the impact of MIS d t
t f due to:
Problems of attribution of impacts to the MIS
actions vis a vis other complementary and often
p y
contemporaneous actions (e.g., market reforms)
The difficulty of specifying the counterfactual (in
terms of the policy environment) for the without-
without
MIS situation.
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4. Why try to estimate impacts?
Conceptual links between better information and
improved market performance
Reasons why private investment may lead to
yp y
insufficient provision of market information
Indivisibility
Non-excludabilityy
Uncertainty
Lack of effective demand among the very poor
New ICT may change some of these reasons (e.g.,
non-excludabiltity), increasing role for private info.
provision
Q
Question remains: At margin, how much to invest
g ,
in public provision of market information relative to
other programs?
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5. Pathways from better
information to better market
performance: implications for
evaluation
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6. Potential Direct Impacts of Better Market
Information & Ways of Evaluating Them
Rent redistribution in short run– e.g.,
reduction in intra-market margins
following introduction of MIS
E.g., early work on Malian MIS
Value consumer savings per kg times market
volumes
Does not examine longer-run growth
implications of such redistribution
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7. Potential Direct Impacts of Better Market
Information & Ways of Evaluating Them
Improved spatial arbitrage of existing
production more stable and possibly higher
average prices
Examples:
Jensen’s (2007) analysis of introduction of cell phones on
J ’ l i f i t d ti f ll h
Kerala fishermen’s prices
Jenny Aker’s (2009) analysis of impact of cell phones on
marketing ma gins Nige
ma keting margins in Niger
Need good data; this approach captures 1st-round
effects only—not longer-term growth or supply
y g g pp y
response
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8. Example: Fish Prices & Mobile Phone
Service in Kerala
Robert Jensen. The Digital Provide: Information (Technology), Market
Performance, and Welfare in the South Indian Fisheries Sector.
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Quarterly Journal of Economics, CXXIII, 3 (Aug. 2007): 879-924.

9. Potential Impacts of Reducing
Actors’ Price Forecast Error
D
Aim is to model (using
J
S
social surplus models)
N H the costs reductions of
being off of the
R W
I
equilibrium price and
Z quantity
L M
E
Constraints:
How to know reduction in
forecast error?
K T
F
D
Quasi-static
O
Estimates of D & S
elasticities
Kizito (2008): Adopted from Hayami and Peterson, 1972
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10. Estimates of with/without
/
improved information over time
Problems of attribution given the
complementarity of information with other
market improvements
Better information as an input into better
policies, which then improves payoffs to
market information (both public and private)
Example of OMA in Mali
E l f i M li
Problem for estimation of impacts everything is
endogenous!
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11. So how to measure impacts of
more dynamic effects?
User satisfaction surveys? Identifying
what information comes from MIS vs
other sources, including the market
itself?
Contingent valuation? Problems of
stated preference vs revealed
vs.
preference?
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12. So how to measure impacts of
more dynamic effects?
Revealed preference of funding by public sector or
through a users’ organization?
May be the most reliable indicator but does this help you
indicator,
ex-ante?
Can you duplicate successful models from elsewhere?
Donor funding crowding out national funding?
Need an explicit transition strategy to national funding
Are we pursuing an impossible objective in trying to
precisely quantify the payoffs to improve market
information?
Quantify what you can, but then build credible stories
on more dynamic effects
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13. Your suggestions?
Thanks for your attention and your
help!
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