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The role of network effects and consumer heterogeneity in the adoption of mobile phones: Evidence from South Africa

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  • Grzybowski, Lukasz

Abstract

In this paper we analyze the role of network effects and consumer heterogeneity in the adoption of mobile phones. We estimate the decision to adopt a mobile phone using panel survey data of South African households between the years 2008 and 2012, which includes interviews with all adult household members. We construct variables which approximate network effects on the household level and find that the greater the number of mobile phones in the household, the greater the likelihood that the other household members will also adopt a mobile phone. Moreover, network effects depend on who in the household adopts a mobile phone. Without within-household network effects the penetration of mobile phones of 76.4% in 2012 would be lower by about 9.9 percentage points. The decision to adopt a mobile phone is also explained by observed and unobserved consumer heterogeneity.

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  • Grzybowski, Lukasz, 2015. "The role of network effects and consumer heterogeneity in the adoption of mobile phones: Evidence from South Africa," Telecommunications Policy, Elsevier, vol. 39(11), pages 933-943.
    • Handle: RePEc:eee:telpol:v:39:y:2015:i:11:p:933-943
    DOI: 10.1016/j.telpol.2015.08.010
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    Cited by:

    1. Grzybowski, Lukasz & Lindlacher, Valentin & Mothobi, Onkokame, 2023. "Mobile money and financial inclusion in Sub-Saharan Africa," Information Economics and Policy, Elsevier, vol. 65(C).
    2. Vicky Gu & Jonathan Davis & Ray Cao & John Vogt, 2017. "The effect of externalities on adoption of social customer relationship management (SCRM)," International Journal of Quality Innovation, Springer, vol. 3(1), pages 1-15, December.
    3. Varshney, Deepak & Mishra, Ashok K. & Joshi, Pramod K. & Roy, Devesh, 2022. "Social networks, heterogeneity, and adoption of technologies: Evidence from India," Food Policy, Elsevier, vol. 112(C).
    4. Mothobi, Onkokame & Grzybowski, Lukasz, 2017. "Infrastructure deficiencies and adoption of mobile money in Sub-Saharan Africa," Information Economics and Policy, Elsevier, vol. 40(C), pages 71-79.
    5. Forenbacher, Ivan & Husnjak, Siniša & Cvitić, Ivan & Jovović, Ivan, 2019. "Determinants of mobile phone ownership in Nigeria," Telecommunications Policy, Elsevier, vol. 43(7), pages 1-1.

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    More about this item

    Keywords

    Mobile phones; Network effects; Consumer heterogeneity;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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