Does cellphone impact on farmers welfare ? Western Indonesia Versus Eastern Indonesia in 2012

Andrini, Retno (1); Tanjung, Anita (1); Panjaitan, Nur Afni (2) (2016). 'Does cellphone impact on farmers welfare ? Western Indonesia Versus Eastern Indonesia in 2012' Paper presented at the annual conference of the HDCA, Tokyo 2016.

abstract Telecommunications is now seen as part of a network-based information economy, where telecommunications can provide information which was considered a very active role in the economy, and gives a benefit to the country. In Indonesia, the development of telecommunications technology today has given the increasingly rapid changes in the management of business activities. Distance and territorial borders of a country is now no longer be an obstacle to the telecommunication technology. Modern societies think that mobile phone is an important item, because it is very practical, easy to use and carry and technology is getting higher. The mobile phone is no longer a luxury item for people. According to the International Telecommunications Union (ITU) (2013), 51,8% of mobile phone ownership in the world was come from developing countries. Unlike the Public Switched Telephone Network (PSTN) or a fixed phone which might be not considered because high cost, requires the customer to have a permanent residential address, as well as the ability to pay monthly bills. The mobile phones tend to be more egalitarian. Using mobile phone, people have lower cost of communication, company can send information quickly so it will decrease transaction costs, as well as the travel cost. In some literature, Corbett (2008) suggests that mobile phones ownership in the productivity of society and welfare. Aker and Isaac (2010) argue the same thing where the welfare of the people in Africa increased as a result of mobile phones. People either in group not poor and poor increased their incomes when have a mobile phone in Afrika. Mostly the researcher found that mobile phones impact on welfare, though mobile phones, people obtain information (Klonner and Nolen, 2008; Labonne and Chase, 2009). With the high economic growth in Asia, the number of mobile phone ownership also increase. It is because, first, the cause of poverty is the lack of information and information obtained by telecommunication. Information can be accessed more easily and increased productivity in developing countries. Second, increased productivity means increase output (GDP). Last, asymmetry information can be avoided. For example, people who lived in rural area usually are farmers. They often do not have the information about price in market, so they do not get much benefit. Hence the purpose of this study is to analyze and to compare the impact of mobile phone ownership on farmer’s welfare in western Indonesia and eastern Indonesia in 2012. We used cross-sectional data from the National Socioeconomic Survey (Susenas) in 2012 in Indonesia. The method used is the propensity score matching (PSM) to see the difference in mobile phone ownership to per capita income. Variables used in the study is the expenditure per capita, mobile phones ownership, gender, marital status, age, education, working status, and employment status in western Indonesia (Java and Sumatera island) and eastern Indonesia (Sulawesi, Maluku, Papua and Borneo island). The hypothesis during the period is there is a difference between the income of farmers who have mobile phones in western Indonesia and who have mobile phones in eastern Indonesia. The advantage can be obtained when there is a decrease in transaction costs, information search costs, as well as the travel cost.

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