Do mobile money services help households to smooth consumption? An empirical analysis of rural households in Tanzania

Details

Supervisors

Guirkinger, Catherine

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [120] en sciences économiques, orientation générale

Abstract

In the absence of formal insurance markets or lack of access to them, shocks can have adverse effects on consumption of households in developing countries. Recent empirical contributions suggest that mobile money, a digital financial service that can be used to store, send or receive money without having a formal bank account, may help households to smooth consumption in the presence of a shock. In this thesis, I analyse the impact of mobile money services on households’ ability to smooth consumption in the presence of rainfall and death shocks using a subsample of 1585 households of the 2010/11 and 2012/13 waves of the Tanzanian National Panel Survey. My results differ from those of the empirical literature since the coefficient of interest shows a negative instead of a positive sign in most specifications. I find that this may because of self-selection of shock-affected households into the use of mobile money services and endogeneity concerns. Therefore, I conclude that additional experimental evidence is required to assess the overall impact of mobile money services on consumption-smoothing.