UC Berkeley UC Berkeley Electronic Theses and Dissertations Title Essays on the Economic Impacts of Mobile Phones in Sub-Saharan Africa Permalink https://escholarship.org/uc/item/5m68z9tz Author Blumenstock, Joshua Evan Publication Date 2012 Peer reviewed|Thesis/dissertation eScholarship.org Powered by the California Digital Library University of California ESSAYS ON THE ECONOMIC IMPACTS OF MOBILE PHONES IN SUB-SAHARAN AFRICA By Joshua Evan Blumenstock A dissertation submitted in partial satisfaction of the requirements for the degree of Doctor of Philosophy in Information Management and Systems in the Graduate Division of the University of California, Berkeley Committee in charge: Professor AnnaLee Saxenian, Chair Professor John Chuang Professor Alain de Janvry Professor Edward Miguel Professor Tapan Parikh Spring 2012 Essays on the Economic Impacts of Mobile Phones in Sub-Saharan Africa Copyright c 2012, Some Rights Reserved (See: Appendix B) Joshua Evan Blumenstock Abstract Essays on the Economic Impacts of Mobile Phones in Sub-Saharan Africa By Joshua Evan Blumenstock Doctor of Philosophy in Information Management and Systems University of California, Berkeley Professor AnnaLee Saxenian, Chair As mobile phones reach the remote corners of the world, they bring with them a sense of great optimism. Hailed as a technology that “can transform the lives of the people who are able to access them,"1 mobile phones have the potential to play a positive role in the lives of many of the world’s poor. Such claims are often reported alongside striking statistics on the uptake of mobile phones in the developing world. Already, over two thirds of the world’s mobile phones are in developing countries. In Nigeria, new subscribers are signing up for mobile phone services at a rate of almost one every second, and Nokia estimates that by the end of 2012 over 90 percent of sub-Saharan Africa will have mobile coverage.2 This dissertation presents an empirical investigation of the role of mobile phones in Rwandan society and economy. The material draws on two summers of field work in sub-Saharan Africa, several thousand interviews with mobile phone owners, and roughly ten terabytes of data on mobile phone use that I obtained from Rwanda’s largest telecommunications operator. In the first chapter, I analyze the distribution of mobile technology within the Rwandan popula- tion, drawing attention to disparities in access to and use of mobile phones between rich and poor, and between men and women. The analysis highlights three sets of results. First, comparing the population of mobile phone owners to the general Rwandan population, I find that phone owners are considerably wealthier, better educated, and more predominantly male. Second, based on self- reported data, I observe statistically significant differences between genders in phone access and use; for instance, women are more likely to use shared phones than men. Finally, analyzing the complete call records of each subscriber, I note large disparities in patterns of phone use and in the structure of social networks by socioeconomic status. The second chapter focuses on the economic implications of the spread of an early form of “mobile money" in Rwanda, and provides empirical evidence that this electronic currency is used to transmit funds to individuals affected by catastrophic shocks. Contrasting two stylized models of prosocial behavior, this analysis provides insight into why people help each other in times of dire need. The findings are based on the analysis of interpersonal interactions occurring immedi- ately before and after a destructive earthquake in Rwanda. The observed pattern of transfers is not consistent with a model of pure charity or altruism, but better fits a model of risk sharing in which individuals mutually insure each other against uncorrelated income shocks. The third and fourth chapters present methodological contributions, and serve to illustrate how mobile phone data can be used to observe and understand the behavior of populations in developing countries, at a level of detail typically unobserved by social scientists. Chapter 3 develops a method for measuring levels and patterns of internal migration. After formalizing the concept of inferred 1‘Mobile phone lifeline for world’s poor’, BBC News, February 19 2007. 2Statistics from United Nations (2007) and ‘Africa: Closing the Digital Divide’, allAfrica.com, February 16, 2009. 1 mobility, I compute this and other metrics for 1.5 million Rwandans, and provide novel quantitative evidence consistent with qualitative findings by other scholars. Chapter 4 describes a new method for using mobile phone data to predict the socioeconomic status of an individual. The approach uses mixed methods and three distinct sources of data: anonymous call records; a government Living Standards and Measurement Survey; and a set of phone surveys I conducted in 2009 and 2010. The chapters in this dissertation develop theory and methods for understanding how mobile technologies influence economic and social behavior, and how new sources of data can be used to provide insight into patterns of human interaction. Taken together, the empirical results indicate that phones have had a positive impact on the lives of some people but, absent intervention, the benefits may not reach those with the greatest need. The ultimate goal of these studies is to better understand how information and communications technologies are changing, and can be used to improve, the lives of people worldwide. 2 This dissertation is dedicated to my parents, Ed Blumenstock and Belle Huang, for helping me to get this far, and to my grandparents, Shing-Yi and Carrie Huang, and Nathan and Paula Blum, for showing me what is important in life. i ii CONTENTS Acknowledgments . .v 1 Disparities in Access and Use of Mobile Phones in Rwanda 1 1.1 Abstract . .1 1.2 Introduction . .2 1.3 Related Work . .3 1.4 Data and Survey Methodology . .4 1.5 Comparison of Phone Users to At-Large Population . .6 1.6 Reported Patterns of Phone Use . .9 1.7 Observed Patterns of Phone Use . 12 1.8 Discussion and Conclusion . 14 2 Charity and Reciprocity in Mobile Phone-Based Giving 17 2.1 Abstract . 17 2.2 Introduction . 18 2.3 The effect of shocks on mobile phone-based transfers . 20 2.4 Charity and reciprocity in interpersonal transfers . 22 2.5 Data . 25 2.6 Results . 31 2.7 Conclusion . 43 2.8 Chapter Appendices . 45 3 Inferring Patterns of Internal Migration from Mobile Phone Call Records 65 3.1 Abstract . 65 3.2 Introduction . 66 3.3 The challenge of measuring internal migration in developing countries . 67 3.4 How ICTs can provide better measures of migration and mobility . 68 3.5 Case Study: Measuring internal migration and mobility in Rwanda . 69 3.6 Discussion . 78 3.7 Conclusion . 82 4 A Method for Estimating the Relationship Between Phone Use and Wealth 85 4.1 Abstract . 85 4.2 Introduction . 86 4.3 Related Work . 86 4.4 Data . 87 4.5 Methods . 88 4.6 Results . 90 4.7 Limitations of our approach . 92 iii 4.8 Conclusion . 94 5 Conclusion 95 Bibliography 95 Appendices 105 A Survey Instruments 107 B Creative Commons License 127 B.1 License . 127 B.2 Creative Commons Notice . 131 iv Acknowledgments The material in this dissertation has benefited greatly from the insight and advice of my advisers and thesis committee: John Chuang, Alain de Janvry, Edward Miguel, and Tapan Parikh. I am deeply indebted to my committee chair and mentor, AnnaLee Saxenian, for her continued support over the past several years. I also gratefully acknowledge financial support from the International Growth Centre, the National Science Foundation, the Institute for Money, Technology and Financial Inclusion, the NET Institute, and Intel Research. Any errors, opinions, and conclusions expressed in this material are my own. Finally, I give my heartfelt thanks to my family and friends for their love and encouragement. Acknowledgments Specific to Chapter 1 I would like to thank Jenna Burrell, Tapan Parikh, Kentaro Toyama, and the three anonymous ref- erees for their thoughtful comments and suggestions. We are grateful to Santhi Kumaran and the faculty and students at the Kigali Institute of Science and Techhnology for helping with the phone survey, and to Nadia Musaninkindi and Jean Marie Nyabyenda for their assistance with the DHS data. Ye (Jack) Shen and Paige Dunn-Rankin provided excellent research assistance. Acknowledgments Specific to Chapter 2 I am grateful for thoughtful comments from Alain de Janvry, Stefano DellaVigna, Frederico Finan, Mauricio Larrain, Ethan Ligon, Jeremy Magruder, Edward Miguel, Alex Rothenberg, Elisabeth Sadoulet, and seminar participants at NEUDC, PACDEV, MWIEDC, and the Berkeley Development Lunch. Acknowledgments Specific to Chapter 3 I gratefully acknowledge financial support from the National Science Foundation and the Inter- national Growth Centre. I would also like to thank Yian Shang for providing excellent research assistance. Acknowledgments Specific to Chapter 4 This study was funded in part by the Institute for Money, Technology, and Financial Inclusion, the National Science Foundation, and the International Growth Centre. Paige Dunn-Rankin provided excellent research assistance. v CHAPTER 1 DISPARITIES IN ACCESS AND USE OF MOBILE PHONES IN RWANDA 1.1 Abstract This chapter provides quantitative evidence of disparities in mobile phone access and use in Rwanda. The analysis leverages data collected in 2,200 field interviews, which were merged with detailed, transaction-level call histories obtained from the mobile telecommunications operator. We present three related results. First, comparing the population of mobile phone owners to the general Rwan- dan population, we find that phone owners are considerably wealthier, better educated, and more predominantly male. Second, based on self-reported data, we observe statistically significant differ- ences between genders in phone access and use; for instance, women are more likely to use shared phones than men. Finally, analyzing the complete call records of each subscriber, we note large disparities in patterns of phone use and in the structure of social networks by socioeconomic status.