Does Inequality Matter? - CEPA

Good Practice in Poverty Measurement
TELEUSE ON A SHOESTRING:
POVERTY REDUCTION THROUGH TELECOM ACCESS
AT THE ‘BOTTOM OF THE PYRAMID’
Abstract
Harsha de Silva & Ayesha Zainudeen 48
It has been argued that inequality in access to telecom services can
lead to limitations in fighting poverty or restricting improved access to
information, more opportunities to build and maintain relationships–social
as well as business-increased work efficiency etc. Many studies have
attempted to demonstrate the impacts of access on income at the macrolevel.
However supporting evidence for this argument at the household
level is limited.
This paper attempts to fill this void through a study of telecom users at the
‘Bottom of the Pyramid’ (BOP) across five Asian countries, namely India,
Pakistan, Philippines, Sri Lanka and Thailand.
The paper looks at the impacts of access to telecom services at a microlevel
in the five countries, from the perspective of the user. It looks at the
perceived impact (positive or negative) in terms of the ability to increase
income or save on expenditure due to access, as well as other benefits.
The findings reveal that telecom users do not perceive the benefits of
telecom access to be as high as previous studies at the macro-level may
suggest. However the paper argues that users do not seem to perceive
the benefits as directly originating from access to telecom services.
The findings show that the price elasticity of demand for telecom services
at the BOP is not as high as previously thought, implying that a fall in
prices may not necessarily lead to a large increase in usage of telecom
services, but instead a rise in disposable income. As a result, it appears
that households at the BOP can reallocate this expenditure to other goods
and services that may have positive impacts on poverty alleviation.
48
Lead Economist and Researcher, LIRNEasia.
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