The Digital Lives of the Poor: Entertainment Traps and Information Isolation

Kamalini Ramdas () and Alp Sungu ()
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Kamalini Ramdas: Department of Management Science and Operations, London Business School, London NW1 4SA, United Kingdom
Alp Sungu: Operations, Information and Decisions, The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104

Management Science, 2024, vol. 70, issue 12, 9089-9100

Abstract: Smartphones have enabled the delivery of life-improving information services to base-of-the-pyramid (BOP) consumers. However, little is known about how the poor interact with the digital world. Through a novel app we developed to investigate real-time smartphone usage, we identify an unnoticed barrier to digital information access by the poor—data shortages. By analyzing over 9.4 million minutes of smartphone usage data from 929 residents of a Mumbai settlement, we find that entertainment consumes 61% of their phone time. Our data reveal that under universally adopted monthly data plans, low-income individuals binge on YouTube and social media, resulting in data shortages and information isolation in the late-plan period. We offer a practical operational solution to this problem—shorter data-replenishment cycles—which serve as a commitment device to curb binge usage. We randomly assign participants to a “capped plan”—with daily data usage caps—or a standard (monthly) plan. Assignment to the capped plan increases late-plan access of invites to health camps sent via WhatsApp, increases attendance at these in-person camps by 27%, and reduces social media binge usage. Most participants (particularly those with low self-control and high fear of missing out) prefer the capped plan, even when costlier—clearly signaling demand. Because capped plans are inherently cheaper to provide, offering them could enable providers to increase BOP customer value and expand access. Our results suggest an opportunity to amplify the impact of life-improving services targeted at the poor by leveraging users’ interactions with smartphone technology.

Keywords: base-of-the-pyramid value creation; mobile data replenishment; information isolation; commitment devices; field experiment (search for similar items in EconPapers)
Date: 2024
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