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Competition Reform and Household Welfare: A Microsimulation Analysis of the Telecommunication Sector in Ethiopia

Carlos Rodriguez Castelan, Eduardo Malásquez (), Rogelio Granguillhome Ochoa and Abdelkrim Araar
Authors registered in the RePEc Author Service: Carlos Rodríguez-Castelán

No 9516, Policy Research Working Paper Series from The World Bank

Abstract: This paper presents a novel method for estimating the likely welfare effects of competition reforms for both current and new consumers. Using household budget survey data from 2015/16 for Ethiopia and assuming a reform scenario that dilutes the market share of the telecommunications state-owned monopoly to 45 percent, the model predicts a 25.3 percent reduction in the price of mobile services and an increase of 4.6 million new users of mobile phone services. This reform is expected to generate a welfare gain of 1.37 percent among all consumers. Poverty rates are expected to decline by 0.31 percentage point, driven by a reduction of 0.22 percentage point for current consumers and 0.09 percentage point among new users. Inequality would increase by 0.23 Gini point since better-off consumers are more likely to reap the benefits of greater competition. This method represents a powerful tool for supporting the analysis of competition reforms in developing countries, particularly in sectors known for excluding significant segments of the population due to high consumer prices.

Keywords: Inequality; ICT Economics; Telecommunications Infrastructure; Information Technology (search for similar items in EconPapers)
Date: 2021-01-20
New Economics Papers: this item is included in nep-com, nep-ict and nep-reg
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http://documents.worldbank.org/curated/en/95988161 ... ctor-in-Ethiopia.pdf (application/pdf)

Related works:
Journal Article: Competition reform and household welfare: A microsimulation analysis of the telecommunication sector in Ethiopia (2022) Downloads
Working Paper: Competition Reform and Household Welfare: A Microsimulation Analysis of the Telecommunication Sector in Ethiopia (2021) Downloads
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