Is better access to mobile networks associated with increased mobile money adoption? Evidence from the micro-data of six developing countries

In several developing countries in Sub-Saharan Africa, accessibility to digital financial services is increasing because of the development of mobile money services. People previously excluded from the financial system have started to have access to financial services such as receiving and sending remittances, saving, and borrowing. This study examines the effect of network accessibility on the use of mobile money in six developing countries (Bangladesh, Kenya, Nigeria, Pakistan, Tanzania, and Uganda) using GPS information on each household and mobile phone network coverage maps. We find that among these six countries, network accessibility is associated with the use of mobile money in a robust way only in Pakistan and Tanzania. In those two countries, when a household location becomes 10 km closer to the center of the area with multiple mobile networks, the probability of using mobile money increases by 10 percent. In the other countries, we did not find a robust relationship between the use of mobile money and network accessibility. This suggests that increasing network accessibility may not be an efficient method for increasing mobile money adoption in certain countries. The fact that mobile money use rates differ between Tanzania and Pakistan also suggests that the effect of mobile networks is unrelated to the overall level of mobile money adoption.     

Non-farm work and food security among farm households in Northern Ghana

This paper examines the impact of non-farm work on household income and food security among farm households in the Northern Region of Ghana. We analyze the impact by employing propensity score matching method that accounts for self-selection bias. The matching results show that participation in non-farm work exerts a positive and statistically significant effect on household income and food security status, supporting the widely held view that income from non-farm work is crucial to food security and poverty alleviation in rural areas of developing countries.     

Determinants of mobile broadband use in developing economies: Evidence from Sub-Saharan Africa

Broadband is seen as a vector of economic growth and social development. In the developing world, mobile technologies are widely adopted and mobile broadband is progressively rolled-out with high expectations on its impact on the countries’ development. We highlight what the determinants of mobile broadband use are in four Sub-Saharan countries. Using micro-level data coming from household surveys over 5 years, from 2013 to 2017, we show that SIM card ownership and being part of an online social community has a strong positive impact on mobile broadband use. We also highlight a positive correlation between digital inclusion and financial inclusion as mobile money users and bank account users are found to be more inclined to use mobile broadband. However, beyond apparent similarities, mobile broadband is used in different ways according to countries specificities. For instance, among the non-mobile owners in Nigeria, the unemployed are the most likely to use mobile broadband, most probably for job search practices, while it is rather used by students for information gathering in other countries. Finally we show that those excluded from mobile broadband use are the eldest, those with the lowest level of education, and women.     

The non-linear relationship between ICT diffusion and financial development

This research investigates the linear and non-linear effects of information and communication technology (ICT) diffusion on financial development for 81 countries over the period 1990–2015 by employing the generalized-momentum method (GMM) and panel smooth transition regression (PSTR). Some main conclusions are presented as follows. First, comparing the different effects of ICT on financial development between the high-income group and the middle- & low-income group, telephone and Internet positively influences both groups’ financial development, whereas mobile cellular causes a negative effect in high-income countries, but a positive effect in middle- & low-income countries. Second, the growth of the Internet and telephones raises the financial development in all regions, while mobile cellular growth positively affects financial development only in Africa. Finally, strong evidence appears that the PSTR models capture the smooth non-linear effects of ICT diffusion on financial development, in which the effect of ICT diffusion on financial development is positive in the lower level of ICT diffusion, but turns negative in the higher level of ICT diffusion.     

Economic impacts of mobile versus fixed broadband

Broadband telecommunication service is growing rapidly and its economic impact is likely to vary considerably around the globe. Considerable interest is being shown in wireless broadband, especially in low income and rural areas. This study focuses on the direct effect (broadband penetration as an input), and separately, the productive efficiency effect of broadband (as an information network externality), using a model developed in Thompson and Garbacz (2007). Aggregate fixed and mobile broadband usage and their effect are analyzed and compared first on a sample of forty-three countries with sufficient data. The same models are used on samples of high income and low income countries. It is hypothesized that the rapid growth of broadband could have a stronger effect for low income countries and their initial levels of network development. Key variables are adjusted to a per household basis, using information on household size. Due to the endogeneity of key variables, instrumental variables are employed to estimate separate equations for mobile broadband and fixed broadband. Predicted values for these variables are used in the final equations in order to adjust for endogeneity and omitted variable bias. The results of the model estimated for the full sample indicate that mobile broadband has an important direct effect on GDP, but fixed broadband has an effect no different than zero. In the models with high and low income samples it is apparent that low income countries derive significantly more benefit from mobile broadband. Estimates from the Stochastic Frontier Model find mobile broadband to be a significant driver of growth via a reduction of inefficiency.     

Friends or Foes? Mobile money interaction with formal and informal finance

Access to formal financial services is a key determinant of financial inclusion and yet, informal mechanisms still dominate the financial system in developing countries. In this context, the purpose of our article is to investigate how the growing effort to harness mobile money designed for unbanked individuals may help to overcome barriers to access formal financial services. Using a unique dataset obtained from an individual-level survey conducted in Burkina Faso, we explore the interplay between mobile money innovation and pre-existing formal and informal financial instruments. Our main findings show that, overall there are no differences in the inclination of mobile money users and non-users to make deposits in formal or informal deposit instruments. However, a closer investigation reveals suggestive evidence that it may increase the probability of participants in informal mechanisms to make deposits in formal financial instruments, especially using a bank account. Moreover, considering disadvantaged groups, we find for women, irregular income and less educated individuals that mobile money may increase their probability to make deposits in a bank and/or credit union accounts. Our results are robust to using instrumental variables and propensity score matching techniques that mitigate the endogeneity problem. They also pass a number of robustness checks as well as considering an alternative dataset. Given the low access to formal financial services in developing countries, our findings taken together indicate how the increasing adoption of mobile money may act as a stepping-stone towards financial inclusion. (JEL Classification C83, D14, G21)     

Population density,migration, and the returns to human capital and land: Insights from Indonesia

Rapid population growth in many developing countries has raised concerns regarding food security and household welfare. To understand the consequences of population growth in a general equilibrium setting, we examine the dynamics of population density and its impacts on household outcomes using panel data from Indonesia, combined with district-level demographic data. Historically, Indonesia has adapted to land constraints through a mix of agricultural intensification, expansion of the land frontier, and non-farm diversification, with public policies playing a role in catalyzing all of these responses. In contemporary Indonesia we find that human capital determines the effect of increased population density on per capita household consumption expenditure. The effect of population density is positive if the average educational attainment is high (above junior high school), while it is negative otherwise. On the other hand, farmers with larger holdings maintain their advantage in farming regardless of population density. The paper concludes with some potential lessons for African countries from Indonesia’s more successful rural development experiences.     

The broadband digital divide and the economic benefits of mobile broadband for rural areas

Broadband is becoming increasingly important to national economies and the personal lives of users. However, broadband availability and adoption are not diffusing in rural and urban areas at the same rates. This article updates the rural broadband digital divide, with special attention paid to mobility. Empirical estimations of broadband provision and usage in the US show that rural areas have fewer high-speed fixed and mobile providers but more slower-speed fixed providers than urban areas. While rural availability of mobile broadband is lower than in urban areas, it still helps fill in gaps in fixed broadband coverage in rural areas. The rural gap in fixed broadband usage remains, but the mobile broadband usage gap disappears after controlling for household demographics. The raw broadband usage gaps between rural and urban households are proportionally greater for low-income households. The potential for mobile broadband to benefit rural areas through economic development is also examined.     

中部地区农村居民消费与农村经济增长关系的实证研究

启动农村居民消费,开拓农村市场,是推动国民经济稳定发展的重大课题。文章运用回归分析、EG协整检验和方差分解等方法对1996年～2007年中部地区农村居民消费与农村经济增长的关系进行了实证研究,基本结论为：中部地区农村居民消费与农村经济增长具有正相关关系,且存在协整关系。     

Reaching out to remote and rural areas: Mobile satellite services and the role of Inmarsat

This paper analyses the problems faced by developing countries in extending telecommunications to remote and rural areas. It identifies some possible technical solutions using mobile satellite services, especially in specialized niche markets, but also ways in which telecommunications can be made more widely available to populations in rural and remote areas. Although means must be found to finance such development, the paper highlights the necessity of implementing policy and regulatory frameworks conducive to the availability of mobile satellite services.     

Housing,Wealth, Income and Consumption: China and Homeownership Heterogeneity

Impacts on consumer spending in urban China associated with housing value, housing equity, financial assets and household income are evaluated using longitudinal data from the China Family Panel Studies (CFPS) survey. Findings suggest that the housing wealth effect on household consumption in China is much larger than has been shown for developed economies. The larger impact is prospectively related to structural limits on investing which favor real estate ownership, along with the dominant position of housing in total household wealth. We also find that a household's consumption varies across housing tenure. Homeowners having joint ownership of property on average have the highest consumption propensity, while those having sole ownership of property consume the most in response to appreciation in housing wealth.     

The impact of a food security program on household food consumption in Northwestern Ethiopia: A matching estimator approach

With the financial support from various development partners, Ethiopia has designed and implemented several programs to improve household food security. Yet, food insecurity is still a major challenge to several millions of people in the country and it is questionable whether the different food security programs implemented over the past years have been successful. Using a propensity score matching method to control for pre-intervention differences, this study examined the impact on household food calorie intake of an integrated food security program (IFSP), which had been implemented in Northwestern Ethiopia by two non-governmental organizations as a case study. The estimated results provide evidence that IFSP has a positive and statistically significant effect on food calorie intake. In particular, IFSP has raised physical food calorie intake by 30% among the beneficiary households. However, we also found that IFSP has differential impact depending on family size, landownership and gender of head of household. Overall, the paper provides evidence that supporting integrated food security programs is important to improve food security in rural areas.     

Financial inclusion,mobile money,and individual welfare: The case of Burkina Faso

Access to financial services promotes investment and facilitates consumption smoothing by enhancing resource mobilization. Over 60 percent of Burkinabe adults are excluded from financial services by banks and other nonbank financial institutions, so mobile money is expected to bridge this gap. Accounting for the importance of financial inclusion with the rapid prevalence of mobile money, this paper assesses the effects of financial inclusion and mobile money use on an individual's nonmonetary welfare in Burkina Faso by applying matching methods. The results confirm the significant role of financial inclusion in alleviating poverty. More importantly, our analysis shows that once individuals access financial services through mobile money, such favorable effects on poverty alleviation become more substantial. Financial regulators in Burkina Faso should promote financial inclusion with mobile money to ensure the efficient enhancement of individual welfare with poverty reduction.     

Rising food prices and undernourishment: A cross-country inquiry

Households’ welfare in developing countries has been hit by dramatic food prices increases which occurred between 2005 and 2008. In this paper, we adopt a partial equilibrium approach to analyze the short-time effects of a staple food price increase on nutritional attainments, as a measure of welfare. The analysis consists of first approximating complete food-demand systems and then performing household level micro-simulations. Instead of focusing on a single country profile, we provide a more complete snapshot by comparing the evidence through a cross-country assessment made possible by the use of nationally representative household surveys. Comparability is assured by the adoption of the same methodological choices in the treatment of the micro data. We find that food price spikes not only reduce the mean consumption of dietary energy, but also worsen the distribution of food calories, further deteriorating the nutritional status of populations. We also discovered that access to agricultural land plays a significant role in ensuring adequate nutritional attainments in rural areas, and surprisingly, even in urban areas.     

Implementing Technologies for Financial Service Innovations in Base of the Pyramid Markets

This study examines how information communications technologies (ICTs) can be implemented effectively to provide financial service innovations to the poor who live in developing countries, a market collectively known as the “Base of the Pyramid” or BOP. The BOP needs—but commonly lacks—basic financial services, a situation that perpetuates poverty. With a dearth of formal banks especially in rural areas of developing countries, the BOP has almost no access to savings accounts, credit lines, and other necessary services. However, ICTs have the potential to overcome cost, infrastructure, and other barriers to service delivery, and are being used to offer new financial services such as mobile phone banking to the BOP. The purpose of this study is to determine ways of successfully implementing these technology‐enabled service innovations. The study draws on the Socio‐Technical View for theoretical girding, and uses case method to examine multiple ICT implementation projects in five sub‐Saharan African countries (Ghana, Kenya, Malawi, Mozambique, and Uganda). The projects, which were carried out by a leading microfinance banking organization named Opportunity International, provided mobile banks, point‐of‐service, and mobile phone banking services to the BOP. Several techniques were applied to gather data in the field over a two‐year period: depth interviews, direct observations, and internal document and data analysis. Multiple forms of evidence were triangulated against one another, and analyzed across cases until themes emerged and converged. In doing so, two specific forms of analysis, explanation building and cross‐case synthesis, were employed to make sense of the data. The findings, summarized as research propositions, collectively conclude that implementation is effective when the unique socio‐human, governmental‐regulatory, and market conditions of the BOP are accounted for, such that fit is achieved between the technologies and environments they are situated in. More specifically, effectiveness comes when implementation (1) addresses customer and agent limits with the technologies, and is accepted and supported by trained staff who monitor technology use and make responsive system adjustments; (2) exploits and promotes supportive governmental regulations and actions, as well as leverages sound electronic fund transfer (EFT) switches, whether government or bank established; and (3) accounts for low business capabilities and evolving market competition, along with the underdeveloped financial sector and financial literacy of the population. In sum, there are multiple factors that should be considered in the design and installation activities surrounding these technologies to ensure they provide cost‐effective, quality financial services to the poor.     

城镇化发展与居民消费 ——基于工业生产率地区差异视角

为探究城镇化发展与居民消费之间的内在作用机制,本文基于工业生产率地区差异视角展开深入研究。结果表明:城镇化率与居民消费率之间不存在自发产生的“U”型演变关系,但工业生产率水平对两者的影响具有明显的地区异质性。因此,必须立足于中国经济发展实际,提高工业生产率水平。同时,加快推进城乡“二元”经济结构向城乡融合发展的转变,实现城镇化发展对居民消费的拉动作用。     

How Does Mortgage Debt Affect Household Consumption? Micro Evidence from China

The high growth rate of mortgage debt in various emerging and developed economies has captured headlines following the financial crisis. In this article, we investigate how mortgage debt impacts household consumption behavior and various components of household consumption. Utilizing comprehensive household survey data from China, we show that households with a mortgage consume a higher portion of income than households without a mortgage. This is in line with the argument that having a mortgage reduces the uncertainty that the household faces regarding how much to save each month in order to be able to own a house, and this reduced uncertainty leads to lower monthly savings for the purpose of buying a house. We also find that among households with a mortgage, those who spend a larger share of their income on mortgage payments spend less on consumption, reflecting the crowding out effect of mortgage payments on household consumption. Furthermore, we show that a government policy of decreasing the maximum loan‐to‐value ratio has a significant impact on households’ consumption. The article offers the first evidence of the impact of growing mortgage debt on the consumption behavior of households, and will have implications for government policies that encourage mortgage borrowing.     

Milking the data: Measuring milk off-take in extensive livestock systems. Experimental evidence from Niger

Milk is an important source of cash and nutrients for many households in developing countries. Yet, our understanding of the role of dairy production in livelihoods and nutritional outcomes is hindered by the lack of decent quality household survey data. Data on milk off-take for human consumption are difficult to collect in household surveys for a number of reasons which make accurate recall challenging for the respondent (continuous production and seasonality among others), introducing possibly severe biases in the computation of full household incomes and farm sales, as well as in the estimation of the contribution of livestock (specifically dairy) production to agricultural value added and the livelihoods of rural households.This paper presents results from a validation exercise implemented in Niger, where alternative survey instruments based on recall methods were administered to randomly selected households, and compared to a 12-month system of physical monitoring and recording of milk production. The results of the exercise show that reasonably accurate estimates via recall methods are possible, and provide a clear ranking of questionnaire design options that can inform future survey operations.     

Impact of modern agricultural technologies on smallholder welfare: Evidence from Tanzania and Ethiopia

This paper evaluates the potential impact of adoption of improved legume technologies on rural household welfare measured by consumption expenditure in rural Ethiopia and Tanzania. The study utilizes cross-sectional farm household level data collected in 2008 from a randomly selected sample of 1313 households (700 in Ethiopia and 613 in Tanzania). The causal impact of technology adoption is estimated by utilizing endogenous switching regression. This helps us estimate the true welfare effect of technology adoption by controlling for the role of selection problem on production and adoption decisions. Our analysis reveals that adoption of improved agricultural technologies has a significant positive impact consumption expenditure (in per adult equivalent terms) in rural Ethiopia and Tanzania. This confirms the potential role of technology adoption in improving rural household welfare as higher consumption expenditure from improved technologies translate into lower poverty, higher food security and greater ability to withstand risk. An analysis of the determinants of adoption highlighted inadequate local supply of seed, access to information and perception about the new cultivars as key constraints for technology adoption.