Estimating Poverty Using Cell Phone Data: Evidence from Guatemala

25 Pages Posted: 27 Feb 2017

See all articles by Marco Hernandez

Marco Hernandez

World Bank

Lingzi Hong

University of Maryland

Vanessa Frias-Martinez

University of Maryland

Andrew Whitby

World Bank

Enrique Frias-Martinez

Telefonica Research

Date Written: February 14, 2017

Abstract

The dramatic expansion of mobile phone use in developing countries has given rise to a rich and largely untapped source of information about the characteristics of communities and regions. Call Detail Records (CDRs) obtained from cellular phones provide highly granular real-time data that can be used to assess socio-economic behavior including consumption, mobility, and social patterns. This paper examines the results of a CDR analysis focused on five administrative departments in the south west region of Guatemala, which used mobile phone data to predict observed poverty rates. Its findings indicate that CDR-based research methods have the potential to replicate the poverty estimates obtained from traditional forms of data collection, like household surveys or censuses, at a fraction of the cost. In particular, CDRs were more helpful in predicting urban and total poverty in Guatemala more accurately than rural poverty. Moreover, although the poverty estimates produced by CDR analysis do not perfectly match those generated by surveys and censuses, the results show that more comprehensive data could greatly enhance their predictive power. CDR analysis has especially promising applications in Guatemala and other developing countries, which suffer from high rates of poverty and inequality, and where limited fiscal and budgetary resources complicate the task of data collection and underscore the importance of precisely targeting public expenditures to achieve their maximum antipoverty impact.

Keywords: Economic Growth, Inequality, Economic Theory & Research, Non Governmental Organizations, Industrial Economics, Economics and Institutions, Public Sector Management and Reform

Suggested Citation

Hernandez, Marco and Hong, Lingzi and Frias-Martinez, Vanessa and Whitby, Andrew and Frias-Martinez, Enrique, Estimating Poverty Using Cell Phone Data: Evidence from Guatemala (February 14, 2017). World Bank Policy Research Working Paper No. 7969, Available at SSRN: https://ssrn.com/abstract=2923520

Marco Hernandez (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Lingzi Hong

University of Maryland ( email )

College Park
College Park, MD 20742
United States

Vanessa Frias-Martinez

University of Maryland ( email )

College Park
College Park, MD 20742
United States

Andrew Whitby

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Enrique Frias-Martinez

Telefonica Research ( email )

West 1 Building
Madrid, 28050
Spain

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