Investigating the well-being implications of mobile money access and usage from a multidimensional perspective

Abstract

Using household survey data gleaned from Ghana, we carried out a microeconometric analysis of the relationship between mobile money (m-money) and multidimensional well-being. A key feature of this paper is the computation of a well-being index, incorporating important household welfare dimensions including health, education, and wealth, thus allowing an examination of the link between m-money and well-being from a multidimensional perspective. Using instrumental variable probit models with phone ownership and public sector employment as instruments, we find that although access to m-money is important it is its usage that has a profound well-being effect. We also explore alternative specifications of the models in which access to, and usage of, m-money explains the variations in the individual well-being components, which also relate to the Sustainable Development Goals. The results from these alternative specifications suggest that there are significant welfare disparities between those who just have access to m-money and those who use it frequently. The policy implication of this finding is that measures that encourage m-money usage would not only promote financial inclusion but also lead to improvement in welfare outcomes and living standards, especially in rural households.