Home > m4d > Mobiles for Impoverishment?

Mobiles for Impoverishment?

If you had to choose three words to sum up the future of ICT4D, they might well be “mobiles, mobiles, mobiles”.  And the way to that future is being more clearly indicated as the promise of mobiles-for-development research comes to fruition; reflected, for example, in the recent 1st “m4d” international research conference.

 

But such research is starting to throw up some perplexing – even worrying – findings about mobiles.  At its bluntest, such research suggests mobiles are doing more economic harm than good, and sometimes making poor people poorer.  Let’s have a look:-

 

a) Kurt DeMaagd’s “Pervasive versus Productive” paper analyses country-level data on mobiles and national productivity as measured by GDP.  He finds that, short-term, there is a negative association between investment in mobiles and GDP in developing countries, possibly because “mobiles represent a diversion of resources away from other productive uses”.

 

b) Kathleen Diga’s “Mobile Cell Phones and Poverty Reduction” dissertation (Ch.5) shows at the micro-level that some rural Ugandan households are sacrificing expenditure on purchased food (e.g. sugar, milk, flour) so they can pay for mobile airtime.  This includes households that “admit to some days of hunger in order to maintain the mobile phone”.  They are also diverting savings into mobile phone purchase and saving for airtime by foregoing attendance at social functions.

 

c) Hosea Mpogole, Hidaya Usanga and Matti Tedre’s “Mobile Phones and Poverty Allevation” paper at the m4d conference researches mobile use in rural Tanzania.  “48% of respondents reported that they sometimes substitute important needs (e.g. education, buying food, and clothes) for mobile phone ownership/usage”.  Modal monthly costs of mobile phone maintenance and use were US$10-20.  Mean costs were US$22.4: an average 19% of monthly income.  And, in a digital variant on the workload of water-carrying in rural Africa, many respondents were undertaking 3-7 kilometer walks 2-3 times per week in order to recharge their mobile batteries.

 

Very interesting research.  To which one might offer four responses.

 

First, I find all three pieces of research to be credible.  However, one should always mine into research methods: what exactly is being measured; exactly what questions are being asked, and what answers might respondents think they are being asked to give; what is the sample size; what assumptions are built into calculations; is the difference between correlation and causation recognised?

 

Second, we have research evidence of mobiles increasing incomes of the poor such as the studies on Keralan fishermen or Heather Horst and Daniel Miller’s work on mobiles in Jamaica or (from a mobiles-as-tools-of-production not tools-of-consumption perspective) studies of “umbrella people” and GrameenPhone operators.  We also have evidence of mobiles saving costs for the poor e.g. work on the informal sector in Nigeria.

 

Third, there is a bigger picture that this research recognises.  DeMaagd notes that, longer-term, mobile-associated GDP downticks seem to be replaced by upticks as “learning and integration with business processes” take place.  Diga echoes this macro-level explanation at the micro-level: households see short-term sacrifices as investments that will provide longer-term security and opportunity.

 

Fourthly, we need to explain a surprising finding in Mpogole et al’s work.  Less than 15% of mobile phone owners interviewed stated that the benefits of owning a mobile phone justified the costs.  Um . . . so if you believe that guys, why on earth do you own a mobile?

 

Diga’s research offers some insight but we can get much more from Harsha de Silva, Ayesha Zainudeen and Dimuthu Ratnadiwakara’s paper (earlier version as: “Teleuse on a Shoestring“) that looked at mobile use in poor communities in five Asian countries.

 

The most negative explanation is that mobiles represent one more step in the ingestion of the poor by the consumer society.  They are sacrificing food for (potentially economically-valueless) status and an identity of modernity, youth, urbanicity, etc that they believe mobile ownership brings.

 

Mobile owners may also be associating questions about financial benefits with direct, enterprise-based income generation via mobile: something that only a few achieve as yet.  They may thus set aside from their cost-benefit calculations the so-far key financial impact: savings from substitution of journey costs.

 

And finally, most research tells us that the poor are using mobiles for social more than business purposes.  This, again, they may set aside from their cost-benefit calculations.  Yet a) the social benefits, such as knowledge that help can be at hand in an emergency, are often highly rated when asked about directly; and b) there is no easy separation in reality of the social and the economic: social networks are often utilised by the poor to maintain or generate financial flows such as remittances or help during a crisis.

 

I think my overall conclusion (apart from the obvious: more research needed) would be two-fold:

 

– Setting aside the possibility of irrationality, the significant amounts being spent by the poor on mobiles indicate that phones have a significant value to the poor.  But that value is some rather complex mix of the financial, the economic, the psychological, the social and the symbolic.

 

– For some poor consumers, the financial benefits of mobiles outweigh the costs.  For some poor consumers they do not.  But we have long known (e.g. via the livelihoods framework) that “poverty” is not just about money and, hence, that poverty interventions and tools can usefully target more than just financial benefits.

 

What we see here, then, is not an argument to try to slam on the mobile brakes.  At most, we have an argument to invest more in sharing or building innovative uses of mobiles that are more directly connected to income generation.

 

Categories: m4d Tags: , ,
  1. makiko21
    28 December 2008 at 11:24 am

    Here is another interesting paper based on panel data in Uganda which finds that the expansion of mobile network coverage has not enhanced the market participation of farmers who trade stable and less perishable products such as maize, but farmers in remote areas who trade perishable products such as bananas.

    The impact of mobile phone coverage expansion on market participation:panel data evidence from Uganda:

    http://www.jica.go.jp/jica-ri/publication/archives/jbic/report/review/pdf/37_05.pdf
    (only the front page is written in Japanese but the article itself is in English)

    As Heeks mentioned above, we have known that the benefit of m4d is not just financial issue but also psychological and social, etc, but this paper shows the innovation of mobile use for the poor is depending on how the poor approach it.

  2. Richard Heeks
    28 December 2008 at 10:26 pm

    This paper cited by Maki is another example of a positive correlation between mobile phone ownership and increased income (for some farmers). As she notes, there is a differentiation in terms of the type of produce: probably farmers of non-perishable produce were already able to search out good markets/prices by non-mobile communication means, whereas farmers of perishable produce were not and, hence, are helped by having a mobile.

    But I’m also interested by the other half of the differentiation: the income gains were mainly found by those farmers who were most remote from their local district centre. So the bumper sticker is: the more remote the user, the greater the income benefit of mobile ownership.

  3. 29 December 2008 at 7:46 pm

    Great thought-provoking post! I hope this is going to become a regular thing. Another piece of research to consider is this article from the Malaria Journal which highlights a correlation between intensity of information and communication networks and reduced probability of deaths of people that are clinically identified as malaria infected. http://www.malariajournal.com/content/6/1/136 This includes broadcast and mobile networks but I think it still applies.

    Your post took me off on a bit of a tangent about the extent to which one can set aside the possibility of irrationality in mobile spending. More about that here http://manypossibilities.net/2008/12/the-rationality-of-mobile-spending/

  4. Richard Heeks
    30 December 2008 at 12:59 am

    Picking up on the rationality or otherwise of decisions by the poor to spend on mobiles, I guess we have to differentiate a narrow “economic rationality” from a broader type of rationality (let’s call that “social rationality”).

    Investing in mobiles is only economically rational if the economic benefit exceeds the cost: we can see that this does not always hold for the poor in developing countries. But investing in mobiles might still be socially rational if it provides social benefits that are perceived to exceed the cost. Economists (and I think Ariely may fall into this category – see Steve’s interesting manypossibilities blog entry) would likely call this “irrational”, but this is debatable.

    If the social benefit of mobile ownership is a greater feeling of security in uncertain situations, that doesn’t seem so irrational. If the social benefit of mobile ownership is a feeling of modernity and higher social status that is created via advertising messages, again that might still be a rational choice. However, it’s more of a stretch to fit it into our conventional categories of what is “developmental”.

    I’m certainly hoping we get more research and soon to understand the extent to which marketing and other symbolic and consumerist influences are at play in the spending decisions of poor citizens vis-a-vis mobiles.

  5. Richard Heeks
    31 December 2008 at 1:45 pm

    Thanks to Adam Denton of GSMA for the link to this study: http://go.worldbank.org/32TSU5TLP0 – “So you want to quit smoking: have you tried a mobile phone ?”

    Very much relates to the issues discussed here – about phone ownership eating into other expenditure but, in this case, showing how people spend less on smoking when they own a mobile.

  1. 29 December 2008 at 7:32 pm
  2. 21 January 2009 at 5:51 pm
  3. 16 October 2009 at 8:34 pm
  4. 28 March 2010 at 10:10 pm

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