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Violence and financial decisions: evidence from mobile money in Afghanistan

Blumenstock, Joshua, Callen, Mike, Ghani, Tarek and González, Roberto (2022) Violence and financial decisions: evidence from mobile money in Afghanistan. Review of Economics and Statistics. ISSN 0034-6535 (In Press)

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We provide evidence that violence reduces the adoption and use of mobile money in three separate empirical settings in Afghanistan. First, we spatially merge nationwide administrative data on 96,000 violent events with the universe of mobile money transactions and find that users exposed to nearby violence reduce their mobile money account balances and conduct fewer transactions. Second, using high-frequency panel survey data from a field experiment, we find that subjects expecting violence are half as likely to respond to a randomized mobile money supply shock as those not expecting violence. Finally, analyzing financial survey data from nineteen of Afghanistan’s 34 provinces, we find that individuals expecting violence hold more cash. Collectively, our evidence suggests that violence can impede the growth of formal financial systems.

Item Type: Article
Additional Information: © 2022 MIT Press.
Divisions: Economics
Subjects: H Social Sciences
JEL classification: O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements: Legal, Social, Economic, and Political
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes
D - Microeconomics > D1 - Household Behavior and Family Economics > D14 - Personal Finance
Date Deposited: 11 Nov 2022 16:45
Last Modified: 11 Nov 2022 16:48

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