The Impact of Public Price Information on Farm Incomes: Lessons from the Ethiopian Commodity Exchange

Access to timely and credible price information is critical for smallholder farmers operating in thin and fragmented markets. This study examines the welfare impacts of public agricultural price information disseminated via plasma screens installed by the Ethiopian Commodity Exchange (ECX). Leveraging spatial and temporal variation in the phased roll-out of 101 plasma screens across Ethiopia as a quasi-experiment, we employ a generalised difference-in-differences strategy, with distance to the nearest screen as a proxy for the costs of price information frictions. We find that halving the distance to the nearest screen significantly increases average real per-capita crop income from ECX-traded crops by 4 per cent. The gains are even larger, about 7.5 per cent, for coffee and sesame, the two most actively traded commodities on the exchange, with effects growing over time. The primary mechanisms identified include higher crop prices for ECX-traded crops and increased land allocation towards these commodities. We find only modest spill-over effects (0.5%) on income from non-ECX crops. Our findings highlight the role of credible public price information in reducing information asymmetries and enhancing smallholder productivity.