Mobile Phones and Development

How the spread of mobile phones improved markets, incomes and access to services in developing countries, with the famous study of Kerala's fishermen.

The spread of mobile phones to billions of people in developing countries has been one of the most important economic changes of recent decades.

Kerala’s fishermen

A famous study by economist Robert Jensen, published in 2007, examined fishing communities in Kerala. Before mobile phones, fishermen returning from sea chose a market to sell their catch without knowing prices elsewhere. Some markets had too much fish, and prices collapsed, with fish wasted; others had too little, and prices soared.

When mobile phone coverage spread along the coast between 1997 and 2001, fishermen began calling markets from sea to find the best prices. Jensen found:

Price dispersion between markets fell dramatically.
Waste of unsold fish nearly disappeared.
Fishermen’s profits rose, and consumer prices fell.

Better information made the market work much better.

Other effects

Research has found mobile phones:

Improve market information for farmers and traders.
Enable mobile money, as with M-Pesa in Kenya.
Help job search and migration.
Connect families separated by migration.
Deliver services: health advice, farming information, education and government services.

Accessibility

For blind and visually impaired people, smartphones with built-in screen readers have become powerful tools for reading, navigation, communication and work, often replacing more expensive specialised devices.

Remaining gaps

Many people, especially poorer women in developing countries, still lack mobile phones or internet access. The GSMA’s reports on the mobile gender gap have found women in low- and middle-income countries are less likely than men to own a smartphone or use mobile internet.

The fisherman's call

A fisherman returning with a large catch phones three nearby markets. One has little fish and high prices, another is flooded. He sails to the market with the best price. When all fishermen do this, supply is spread more evenly, prices stabilise, and less fish is wasted. A phone call improves the whole market.

Thinking phones only offer entertainment

Mobile phones provide crucial market information, financial services, access to jobs and services, and accessibility tools. Their economic effects have been large, especially for poorer people.

Key takeaways

Mobile phones spread rapidly across developing countries.
Jensen's 2007 study found phones cut price differences and waste in Kerala's fish markets.
Phones enable mobile money, job search, services and accessibility tools.
Gender and income gaps in phone ownership remain.