Making markets work

Published: Sunday 31 August 2008

-- (Credit: NEHA JOSHI)Rising food prices have evoked protests, and even caused riots in many countries including Mexico, Haiti and Egypt. In Italy people have found a novel way to reduce their worries. If Italians feel that their local food retailer is charging unreasonable prices, they can now call on a new service to help them haggle or walk away: an sms that tells them the different prices in the different areas of Italy

The sms system, set up jointly by the Italian agriculture ministry and consumer associations, helps check the average price of different foods in northern, central and southern Italy. Luca Di Maio, a consultant for the Consumer Federation in Rome, says the new system lets consumers type the name of the food product they want to price check into their mobile phone and send a free text message to a number. "After a few seconds you will receive an sms that will tell you the different prices in the different areas of Italy," he says.

According to Tom Standage, business editor of The Economist , markets are more efficient when you have more information. "If you are in a supermarket and there's a price for tomatoes and that's the only piece of information you have, you've got no idea whether you should be protesting by not buying it," he says. He explains that for supply and demand to work at its best, consumers need to be able to compare different prices from suppliers on the spot, something the texting service and others like it should help make easier.

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