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

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 mar...

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Main Authors:	Rodriguez-Castelan, Carlos, Araar, Abdelkrim, Malasquez, Eduardo A., Granguillhome Ochoa, Rogelio
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2021
Subjects:	COMPETITION REFORM WELFARE EFFECTS SIMULATIONS INFORMATION AND COMMUNICATION TECHNOLOGY POVERTY REDUCTION SHARED PROSPERITY CONSUMPTION STATE-OWNED ENTERPRISES TELECOMMUNICATIONS
Online Access:	http://documents.worldbank.org/curated/en/959881611167650082/Competition-Reform-and-Household-Welfare-A-Microsimulation-Analysis-of-the-Telecommunication-Sector-in-Ethiopia http://hdl.handle.net/10986/35030

id	okr-10986-35030
recordtype	oai_dc
spelling	okr-10986-350302022-09-20T00:09:59Z Competition Reform and Household Welfare : A Microsimulation Analysis of the Telecommunication Sector in Ethiopia Rodriguez-Castelan, Carlos Araar, Abdelkrim Malasquez, Eduardo A. Granguillhome Ochoa, Rogelio COMPETITION REFORM WELFARE EFFECTS SIMULATIONS INFORMATION AND COMMUNICATION TECHNOLOGY POVERTY REDUCTION SHARED PROSPERITY CONSUMPTION STATE-OWNED ENTERPRISES TELECOMMUNICATIONS 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. 2021-01-21T16:52:36Z 2021-01-21T16:52:36Z 2021-01 Working Paper http://documents.worldbank.org/curated/en/959881611167650082/Competition-Reform-and-Household-Welfare-A-Microsimulation-Analysis-of-the-Telecommunication-Sector-in-Ethiopia http://hdl.handle.net/10986/35030 English Policy Research Working Paper;No. 9516 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa Africa Eastern and Southern (AFE) Ethiopia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	COMPETITION REFORM WELFARE EFFECTS SIMULATIONS INFORMATION AND COMMUNICATION TECHNOLOGY POVERTY REDUCTION SHARED PROSPERITY CONSUMPTION STATE-OWNED ENTERPRISES TELECOMMUNICATIONS
spellingShingle	COMPETITION REFORM WELFARE EFFECTS SIMULATIONS INFORMATION AND COMMUNICATION TECHNOLOGY POVERTY REDUCTION SHARED PROSPERITY CONSUMPTION STATE-OWNED ENTERPRISES TELECOMMUNICATIONS Rodriguez-Castelan, Carlos Araar, Abdelkrim Malasquez, Eduardo A. Granguillhome Ochoa, Rogelio Competition Reform and Household Welfare : A Microsimulation Analysis of the Telecommunication Sector in Ethiopia
geographic_facet	Africa Africa Eastern and Southern (AFE) Ethiopia
relation	Policy Research Working Paper;No. 9516
description	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.
format	Working Paper
author	Rodriguez-Castelan, Carlos Araar, Abdelkrim Malasquez, Eduardo A. Granguillhome Ochoa, Rogelio
author_facet	Rodriguez-Castelan, Carlos Araar, Abdelkrim Malasquez, Eduardo A. Granguillhome Ochoa, Rogelio
author_sort	Rodriguez-Castelan, Carlos
title	Competition Reform and Household Welfare : A Microsimulation Analysis of the Telecommunication Sector in Ethiopia
title_short	Competition Reform and Household Welfare : A Microsimulation Analysis of the Telecommunication Sector in Ethiopia
title_full	Competition Reform and Household Welfare : A Microsimulation Analysis of the Telecommunication Sector in Ethiopia
title_fullStr	Competition Reform and Household Welfare : A Microsimulation Analysis of the Telecommunication Sector in Ethiopia
title_full_unstemmed	Competition Reform and Household Welfare : A Microsimulation Analysis of the Telecommunication Sector in Ethiopia
title_sort	competition reform and household welfare : a microsimulation analysis of the telecommunication sector in ethiopia
publisher	World Bank, Washington, DC
publishDate	2021
url	http://documents.worldbank.org/curated/en/959881611167650082/Competition-Reform-and-Household-Welfare-A-Microsimulation-Analysis-of-the-Telecommunication-Sector-in-Ethiopia http://hdl.handle.net/10986/35030
_version_	1764482174213423104

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

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