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Determinants of a digital divide in Sub-Saharan Africa : a spatial econometric analysis of cell phone coverage

  • Buys, Piet
  • Dasgupta, Susmita
  • Thomas, Tim
  • Wheeler, David

Most discussions of the digital divide treat it as a"North-South"issue, but the conventional dichotomy doesn't applyto cell phones in Sub-Saharan Africa. Although almost all Sub-Saharan countries are poor by international standards, they exhibit great disparities in coverage by cell telephone systems. Buys, Dasgupta, Thomas and Wheeler investigate the determinants of these disparities with a spatially-disaggregated model that employs locational information for cell-phone towers across over 990,000 4.6-km grid squares in Sub-Saharan Africa. Using probit techniques, a probability model with adjustments for spatial autocorrelation has been estimated that relates the likelihood of cell-tower location within a grid square to potential market size (proximate population); installation and maintenance cost factors related to accessibility (elevation, slope, distance from a main road, distance from the nearest large city); and national competition policy. Probit estimates indicate strong, significant results for the supply-demand variables, and very strong results for the competition policy index. Simulations based on the econometric results suggest that a generalized improvement in competition policy to a level that currently characterizes the best-performing states in Sub-Saharan Africa could lead to huge improvements in cell-phone area coverage for many states currently with poor policy performance, and an overall coverage increase of nearly 100 percent.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4516.

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Date of creation: 01 Feb 2008
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Handle: RePEc:wbk:wbrwps:4516
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