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Gain and Free-Ride on Skydom: The Effect of an Information-Sharing Platform on Rural China

Gain and Free-Ride on Skydom: The Effect of an Information-Sharing Platform on Rural China. Zhigang Li, The University of Hong Kong Qiao Yu, Tsinghua University Xiaoyu Dong, Sichuan Telecom. The Skydom. A network consisting of a central server, multiple terminals (located in villages),

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Gain and Free-Ride on Skydom: The Effect of an Information-Sharing Platform on Rural China

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  1. Gain and Free-Ride on Skydom: The Effect of an Information-Sharing Platform on Rural China Zhigang Li, The University of Hong Kong Qiao Yu, Tsinghua University Xiaoyu Dong, Sichuan Telecom

  2. The Skydom • A network consisting of • a central server, • multiple terminals (located in villages), • personnel in charge of the terminals, • and devices connected to the terminals that can receive/send (short) text messages from/to farmers/governments/farmers’ associations • Two way information flow possible • The network (Skydom Information Network) covered 1/3 of villages in Sichuan province of China by 2006

  3. Research Questions • Have the Skydom improved the performance of • farmers’ production and • the operation efficiency of farmers’ associations? • Why? • Reduction in information-conveying cost

  4. Data • All villages covered by the Skydom (around 1000) • March-April, 2006 • 10-15 questionnaires for farmers and 3-5 for farmers’ associations per village • Success rate: 40% • Farmers: 4,507 • Farmers’ associations: over 200

  5. Main Issues with Data • Selective sampling • Selection by surveyors • Selection by famers (associations) in joining the Skydom (the only provider of the kind of network benefit)

  6. Summary Statistics Mean# of Obs. Male .23 4,440 HH Income 21,000 4,351

  7. Joining Skydom and Farmers’ Performance

  8. Why Joining Skydom was Insignificantly Related to Farmers’ Performance? • Self selection • Information available might not be valuable • Free-riding • Significant share of farmers who claim to receive Skydom information but admit that they have not joined Skydom • Surprisingly low ratio of WTP-Benefit for Skydom service

  9. Joining Skydom and the Efficiency of Farmers’ Associations

  10. Regression Results (Farmers’ Associations)

  11. Possible Explanations • Skydom reduced the cost of conveying information • Self selection: Managers that are more concerned about the information-conveying efficiency are more likely to join Skydom • Measurement errors: Managers of associations that join Skydom might be willing to exaggerate the increase in their organizations’ efficiency.

  12. Important Message from this Study • The benefit of this kind of network might be especially high for farmers’ associations. It is worth investigating further. • It might much more complicated to use the similar kind of network to generate significant benefits to farmers • Tailoring information to farmers’ need(given the capacity restriction of cell phone text-messaging) • Free-riding

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