Communication Infrastructure and Stabilizing Food Prices: Evidence from the Telegraph Network in China
利用19世纪中国电报网络扩张的历史场景，研究发现电报接入降低了极端粮价的发生频率和幅度，并改变了价格对本地和外地天气冲击的反应模式。
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.