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

World Development Vol. 37, No. 9, pp. 1494–1505, 2009  2009 Elsevier Ltd. All rights reserved 0305-750X/$ - see front /locate/worlddev doi:10.1016/j.worlddev.2009.01.011Determinants of a Digital Divide in Sub-Saharan Africa: A Spatial Econometric Analysis of Cell Phone CoveragePIET BUYS, SUSMITA DASGUPTA, TIMOTHY S. THOMAS World Bank, Washington, DC, United States andDAVID WHEELER * Center for Global Development, Washington, DC, United StatesSummary. — 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. Key words — Sub-Saharan Africa (SSA), GSM cell phone, spatial probit, Markov Chain Monte Carlo (MCMC), competition policy*We dedicate this paper to our friend, colleague, and co-researcher Piet Buys, who died in a tragic accident during the latter part of our research. The authors are listed in alphabetical order. We thank Vivien Foster, Cecilia M. Briceno-Garmendia, Maria Shkaratan, Sudeshna Ghosh Banerjee, KenChomitz, and Uwe Deichmann for information on Telecom reforms, useful comments, and suggestions.The findings, interpretations, and conclusions in this paper are entirely ours. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Final revision accepted: January