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Determinants of a Digital Divide in Sub-Saharan Africa : A Spatial Econometric Analysis of Cell Phone Coverage

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Africa
2012-03-30T07:33:01Z | 2012-03-30T07:33:01Z | 2009

This paper investigates the determinants of disparities in coverage by cell telephone systems in Sub-Saharan Africa. It uses a spatially disaggregated probit for over 990,000 grid cells with adjustments for spatial autocorrelation. Determinants include potential market size (population); cost factors related to accessibility (elevation, slope, distance from a main road, and distance from the nearest large city); and competition policy. Estimates indicate significant results for the supply-demand variables, and very strong results for the competition policy index. Simulations suggest that a generalized improvement in competition policy could lead to huge improvements in cell phone area coverage, and to an overall coverage increase of nearly 100%.

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