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To gamble or not to gamble? The effect of mobile money on gambling in Kenya

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  • Nan, Wenxiu (Vince)
  • Li, Tao

Abstract

Mobile money (MM) enables users, especially the unbanked, to access financial services via mobile phones in developing countries. Whereas much has been studied about the socioeconomic benefits of MM in sub-Saharan Africa, little is known about whether and how MM use influences risk-taking behaviors such as gambling. This paper documents that MM use leads to the heightened probability of gambling and this probability increases with use frequency. Moreover, we find that young male MM users with a lower socioeconomic status (i.e., unemployed, low education, and low income) are more likely to engage in gambling. Our findings call for policymakers’ attention to the potential for unintended consequence of MM.

Suggested Citation

  • Nan, Wenxiu (Vince) & Li, Tao, 2024. "To gamble or not to gamble? The effect of mobile money on gambling in Kenya," Economics Letters, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:ecolet:v:234:y:2024:i:c:s0165176523004512
    DOI: 10.1016/j.econlet.2023.111425
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    References listed on IDEAS

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    1. Christopher Baum & Yingying Dong & Arthur Lewbel & Tao Yang, 2012. "Binary choice models with endogenous regressors," SAN12 Stata Conference 9, Stata Users Group.
    2. Richard Chamboko & Sevias Guvuriro, 2021. "The Role of Betting on Digital Credit Repayment, Coping Mechanisms and Welfare Outcomes: Evidence from Kenya," IJFS, MDPI, vol. 9(1), pages 1-12, February.
    3. Yingying Dong & Arthur Lewbel, 2015. "A Simple Estimator for Binary Choice Models with Endogenous Regressors," Econometric Reviews, Taylor & Francis Journals, vol. 34(1-2), pages 82-105, February.
    4. William Jack & Tavneet Suri, 2014. "Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution," American Economic Review, American Economic Association, vol. 104(1), pages 183-223, January.
    5. Janine Aron, 2018. "Mobile Money and the Economy: A Review of the Evidence," The World Bank Research Observer, World Bank, vol. 33(2), pages 135-188.
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    More about this item

    Keywords

    Mobile money; Gamble; Socioeconomic status; Kenya;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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