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

by Piet Buys, Susmita Dasgupta, Timothy S. Thomas, David Wheeler
World Development ()

Abstract

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%. © 2009 Elsevier Ltd. All rights reserved.

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