Communication Infrastructure and Stabilizing Food Prices: Evidence from the Telegraph Network in China

• 成果类型: Article
• 署名作者: Gao, Pei; Lei, Yu-Hsiang
• 署名单位: New York University; NYU Shanghai; Yale NUS College
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.20190416
• 发表日期: 2021
• 页码: 65-101
• 关键词: information frictions; market performance; TRADE; 18th-century; expansion; openness; welfare; COSTS

摘要

This paper exploits a unique historical setting-the expansion of the telegraph network in nineteenth-century China when railroads were limited-to examine whether the reduction of information frictions stabilizes grain prices. Employing a difference-in-difference (DID) strategy, we find that the telegraph access (i) reduced both the magnitude and the incidence of extreme prices; (ii) mitigated price responses to local weather shocks but increased the responsiveness to shocks in other telegraph-connected regions; (iii) affected the price volatility in a mean-reverting pattern; i.e., volatility rose in previously price-stable regions, and volatility decreased in price-unstable regions.