Gain and Free-Ride on Skydom:
The Effect of an InformationSharing Platform on Rural China
Zhigang Li, The University of Hong Kong
Qiao Yu, Tsinghua University
Xiaoyu Dong, Sichuan Telecom
The Skydom
• A network consisting of
–
–
–
–
a central server,
multiple terminals (located in villages),
personnel in charge of the terminals,
and devices connected to the terminals that can
receive/send (short) text messages from/to
farmers/governments/farmers’ associations
– Two way information flow possible
• The network (Skydom Information Network)
covered 1/3 of villages in Sichuan province of
China by 2006
Research Questions
• Have the Skydom improved the
performance of
– farmers’ production and
– the operation efficiency of farmers’
associations?
• Why?
– Reduction in information-conveying cost
Data
• All villages covered by the Skydom
(around 1000)
• March-April, 2006
• 10-15 questionnaires for farmers and 3-5
for farmers’ associations per village
• Success rate: 40%
– Farmers: 4,507
– Farmers’ associations: over 200
Main Issues with Data
• Selective sampling
– Selection by surveyors
– Selection by famers (associations) in joining
the Skydom (the only provider of the kind of
network benefit)
Summary Statistics
Male
HH Income
Mean
.23
21,000
# of Obs.
4,440
4,351
Joining Skydom and Farmers’
Performance
Why Joining Skydom was Insignificantly
Related to Farmers’ Performance?
• Self selection
• Information available might not be
valuable
• Free-riding
– Significant share of farmers who claim to
receive Skydom information but admit that
they have not joined Skydom
– Surprisingly low ratio of WTP-Benefit for
Skydom service
Joining Skydom and the Efficiency
of Farmers’ Associations
Regression Results (Farmers’
Associations)
Possible Explanations
• Skydom reduced the cost of conveying
information
• Self selection: Managers that are more
concerned about the information-conveying
efficiency are more likely to join Skydom
• Measurement errors: Managers of associations
that join Skydom might be willing to exaggerate
the increase in their organizations’ efficiency.
Important Message from this Study
• The benefit of this kind of network might
be especially high for farmers’
associations. It is worth investigating
further.
• It might much more complicated to use the
similar kind of network to generate
significant benefits to farmers
• Tailoring information to farmers’ need (given the
capacity restriction of cell phone text-messaging)
• Free-riding