Violence and Financial Decisions: Evidence from Mobile Money in Afghanistan

Joshua E. Blumenstock, Michael Callen, Tarek Ghani and Robert Gonzalez
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Joshua E. Blumenstock: University of California, Berkeley
Tarek Ghani: Washington University in St. Louis

The Review of Economics and Statistics, 2024, vol. 106, issue 2, 352-369

Abstract: We provide evidence that violence reduces the adoption and use of mobile money in three separate empirical settings in Afghanistan. First, analyzing nationwide mobile money transaction logs, we find that users exposed to violence reduce use of mobile money. Second, using panel survey data from a field experiment, we show that subjects expecting violence are significantly less likely to respond to random inducements to use mobile money. Finally, analyzing nationwide financial survey data, we find that individuals expecting violence hold more cash. Collectively, this evidence suggests that violence can impede the growth of formal financial systems.

Date: 2024
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