Zap it to Me: Evidence from a Mobile Money Transfer Experiment
The Department of Economics Applied Microeconomics Seminar Series presents
“Zap it to Me: Evidence from a Mobile Money Transfer Experiment”
with Jenny Aker, Assistant Professor of Economics, The Fletcher School and Department of Economics, Tufts University
Tuesday, May 15, 2012
Social Science Plaza B (SSPB), Room 3266 (Econ Library)
Conditional and unconditional cash transfers have been effective in improving development outcomes in a variety of contexts, yet the costs of these programs to program recipients and implementing agencies are rarely discussed. The introduction of mobile money transfer systems in many developing countries offers new opportunities for a more cost-effective means of implementing cash transfers. Aker reports on the first randomized evaluation of a cash transfer program delivered via the mobile phone. In response to a devastating drought in Niger, households in targeted villages received monthly cash transfers as part of a social protection program. One-third of targeted villages received a monthly cash transfer via a mobile money transfer system (called zap), whereas one-third received manual cash transfers and the remaining one-third received manual cash transfers plus a mobile phone. She shows that the zap delivery mechanism strongly reduced the variable distribution costs for the implementing agency, as well as program recipients’ costs of obtaining the cash transfer. The zap approach also resulted in additional benefits: households in zap villages used their cash transfer to purchase a more diverse set of goods, had higher diet diversity, and grew more types of crops, especially marginal cash crops grown by women. These results are robust to the use of a Bonferonni correction for multiple hypothesis-testing. Aker posits that the primary mechanism underlying these results is the greater privacy related to the zap mechanism, resulting in changes in intra-household decision-making. This suggests that m-transfers could be a cost-effective means of providing cash transfers for remote rural populations.
For further information, please contact Gloria Simpson, firstname.lastname@example.org or 949-824-5788.