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Mobile Money in Tanzania
Marketing Science (2017)
  • Nicholas Economides, New York University
  • Przemyslaw Jeziorski, University of Californnia Berkeley
In developing countries, mobile telecom networks have emerged as major providers of financial services, bypassing the sparse retail networks of traditional banks. We analyze a large individual-level data set of mobile money transactions in Tanzania to provide evidence of the impact of mobile money on alleviating nancial exclusion in developing countries. We identify three types of transactions:(i) money transfers to others; (ii) short distance money self-transportation; and (iii) money storage for short to medium periods of time. We utilize a natural experiment of an unanticipated increase in transaction fees to identify the demand for
these transactions. Using the demand estimates, we nd that the willingness to pay to avoid walking with cash an extra kilometer (short distance self-transportation) and to avoid storing money at home (money storage) for an extra day are 1.25% and 0.8% of an average transaction, respectively, which demonstrates that mobile money ameliorates signi cant amounts of crime-related risk. We explore the implications of these estimates for pricing and demonstrate the pro tability of incentive-compatible price discrimination based on type of service, consumer location, and distance between transaction origin and destination. We show that di erential pricing based on the features of a transaction delivers a Pareto improvement.
  • mobile banking,
  • Tanzania,
  • banking,
  • telecommunications,
  • crime
Publication Date
Spring May 1, 2017
Citation Information
Nicholas Economides and Przemyslaw Jeziorski. "Mobile Money in Tanzania" Marketing Science (2017)
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