Airtime transfers and mobile communications: Evidence in the aftermath of natural disasters

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Journal of Development Economics, ISSN: 0304-3878, Vol: 120, Page: 157-181

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Joshua E. Blumenstock; Nathan Eagle; Marcel Fafchamps
Elsevier BV
Social Sciences; Economics, Econometrics and Finance
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article description
We provide empirical evidence that Rwandans use the mobile phone network to transfer airtime to those affected by unexpected shocks. Using an extensive dataset on mobile phone activity in Rwanda and exploiting the quasi-random timing and location of natural disasters, we show that individuals make transfers and calls to people affected by disasters. The magnitude of these transfers is small in absolute terms, but statistically significant; in response to the Lake Kivu earthquake of 2008, we estimate that roughly US$84 in airtime was transferred to individuals in the affected region, that 70% of these transfers were immediately used to make outgoing calls, and that US$16,959 was spent calling those near the epicenter. Unlike other forms of interpersonal transfers, mobile airtime is sent over large geographic distances and in response to covariate shocks. Transfers are more likely to be sent to wealthy individuals, and are sent predominantly between pairs of individuals with a strong history of reciprocal favor exchange.