Abstract:
This paper shows that mobile connectivity transforms household livelihoods in ways that foster food market integration in WAEMU countries. Using cross-sectional data on nearly 60,000 households and 146 food products traded across 5,000 enumeration areas in eight member states (2018-2019), the authors combine dyadic and instrumental-variable estimations to identify a demand-led process of spatial food price integration. Dyadic results show that connectivity operates through a spatially layered mechanism: supply-side arbitrage dominates across distant markets and for perishable products, while at local scales price convergence takes the form of a rural-urban catch-up, indicating demand-side adjustments. Household-level analysis supports this mechanism, showing that mobile ownership in covered rural areas increases food purchases and reduces self-consumption, driven by mobile money use and diversification into non-agricultural activities. However, non-adopters in the same locations reduce spending, suggesting negative externalities from higher local prices and limited income gains, and hence heterogeneous welfare effects of connectivity. The update includes the addition of econometric tests of the effect of connectivity on the spatial dispersion of food prices, improvements to the statistical treatment of certain variables used in the analysis, and a reorganisation of the paper's content.
