The Adoption of Network Goods: Evidence from the Spread of Mobile Phones in Rwanda.

This article develops a method to estimate and simulate the adoption of a network good. I estimate demand for mobile phones as a function of individuals' social networks, coverage, and prices, using transaction data from nearly the entire network of Rwandan mobile phone subscribers at the time, over...

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Publicado en:Review of Economic Studies Vol. 86; no. 3; pp. 1033 - 1061
Autor principal: Björkegren, Daniel
Formato: Artículo
Publicado: Oxford University Press / USA May2019
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: The Adoption of Network Goods: Evidence from the Spread of Mobile Phones in Rwanda.
      aug:
        au: Björkegren, Daniel
        affil: Brown University
      su:
        Economic demand
        Cell phones
        Public welfare
        Rural telecommunication
        Subscription services
        Wireless telecommunication services industry
      sug:
        subj:
          Economic demand
          Cell phones
          Public welfare
          Rural telecommunication
          Emergency and Other Relief Services
          Other Individual and Family Services
          Health and Welfare Funds
          Administration of Human Resource Programs (except Education, Public Health, and Veterans' Affairs Programs)
          Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
          Wireless Telecommunications Carriers (except Satellite)
          Electronics Stores
          Electronic components, navigational and communications equipment and supplies merchant wholesalers
          Subscription services
          Wireless telecommunication services industry
      keyword:
        Information technology
        Infrastructure
        Network goods
        Information technology
        Infrastructure
        Network goods
      ab: This article develops a method to estimate and simulate the adoption of a network good. I estimate demand for mobile phones as a function of individuals' social networks, coverage, and prices, using transaction data from nearly the entire network of Rwandan mobile phone subscribers at the time, over 4.5 years. I estimate the utility of adopting a phone based on its eventual usage: subscribers pay on the margin, so calls reveal the value of communicating with each contact. I use this structural model to simulate the effects of two policies. A requirement to serve rural areas lowered operator profits but increased net social welfare. Developing countries heavily tax mobile phones, but standard metrics that neglect network effects grossly understate the true welfare cost in a growing network, which is up to 3.12 times the revenue raised. Shifting from handset to usage taxes would have increased the surplus of poorer users by at least 26%.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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