Impact Of Mobile Money (Jack & Suri, Lee: Training, Riley: Social Pressure)

Question 1

Jack and Suri: what was the research question

Answer 1

See how a shock effects M-PESA users vs non users

Done by a regression
Yijt =γShockijt +θXijt +αi +njt +πt +εijt

Individual i living in j at time t

Question 2

Results: What happens to…

Consumption per capita in a shock?
total expenditure
medical expenditure in a health shock
non-food expenditure
food expenditure

Answer 2

Consumption per capita increases for M-PESA users, falls for non-users following a shock. (Users are more resilient to shocks; can borrow money from far away risk network)

Total expenditure increased for M-PESA, fell for non.

Medical expenditure increased for both. (Makes sense as health shock)

Non-food expenditure increased for M-PESA, fell for non.

Food consumption increased for M-PESA, fell for non.

(so basically all increased for M-PESA users, and all fell for nonusers EXCEPT MEDICAL AS EXPECTED)

Question 3

Effect on likelyhood of receiving remittances following a shock

Answer 3

M-PESA users have a higher likelihood of receiving remittances, since can get money easier from their more diverse risk network

Question 4

Effect on networks (no. of people sending remittances) following a shock

Answer 4

M-PESA users - Number of people sending remittances increased (network increased), while non users the number reduces overtime.

Question 5

What happens if M-PESA agent is close

Answer 5

Closer , easier to access to M-PESA and adapt to a shock better (2017-2015 went from 46% to 68% within 1km)

Question 6

Do male headed or female headed households perform better?

Answer 6

Females allocate expenditures towards the welfare of the family.

(remember earlier in savings topic of why ROSCAS exist: Anderson & Baland: to protect female income: men spend on personal consumption e.g cigarettes)

Question 7

Is occupational diversification away from farming good or bad?

Answer 7

good, less prone/affected by shocks.

Question 8

Overalll results of Jack and Suri

How much did M-PESA reduce poverty by?
How many women switched occupation (away from farming), and to what?

Answer 8

2% (196K households out of extreme poverty)

186K women switched from farming to business/retail. Reducing vulnerability to shocks

Question 9

Lee et al:

Answer 9

Gave training on how to use mobile money, and then study effects on:

consumption, education (hours studied) , migrants SoL, savings/borrowing

(Similar to Cai et al in the topic of insurance, where they found payoffs were beneficial in increasing insurance renewal for farmers ONLY with financial education in the long run!)

Question 10

4 significant findings following the training

(Consumption, hours studied, migrant workers, saving/borrowing)

Answer 10

Consumption increased

Hours studied increased

Migrant workers living standards improved

Savings increased, so borrowing fell! (putting money away virtually is better than negative returns to saving at home!)

Question 11

Riley: what was the research question and the research design?

(Hint: businesswomen in Uganda)

Answer 11

Is pressure to share money why business remain small and unprofitable?

Design:
Control group got a cash loan
2nd: MM account access + cash loan
3rd: business labelled MM account + loan ON the MM account.

Question 12

How does mobile money raise women’s empowerment (2)

Answer 12

increases women’s bargaining power within the household

better enabling women to enact their preferences

Question 13

Other evidence of MM raising women’s empowerment (2

Answer 13

Aker - MM raises women’s decision making power

Bastian - MM saving accounts increased empowerment in Tanzania

Question 14

Findings in Riley in terms of business outcomes

Answer 14

3rd group: Mobile account + mobile loan - increased profits and capital (investment) , but not savings.

Cash has no impact (so pressured to share!)

Question 15

So for these reasons, Riley also looked at social pressure to share money. How?

Answer 15

Created Index of social pressure to share money

Question 16

4 factors in this index

Answer 16

Willingness to pay to control money over spouse (in incentivised game)

If women were married

When money is in hand and spouse takes it

If a household has another business

Question 17

Findings: is social pressure to share money a reason why businesses remain small and unprofitable

Answer 17

Yes

So mobile money is useful in preventing giving into family pressure. (As shown by the 2nd and 3rd treatment group yielding higher profits and capital)

Question 18

Mobile money usage across genders

Answer 18

Gender gap in the usage in low/middle income countries - men control most the mobile money.

(Good evaluation point!)