Mobile Money Use and Household Vulnerability to Food Poverty in Ghana

Abstract

Ever since the Food and Agricultural Organization (FAO) added the (fourth) stability dimension of food security in 2009, vulnerability to food poverty analysis has been preferred to the incidence of food poverty and food insecurity analysis. While food insecurity is static to a point in time, vulnerability to food poverty is prospective and drives the former. Following the FAO stability dimension, this study examined how using mobile money channels to receive remittances for consumption affects household vulnerability to food poverty in Ghana. Using cross-sectional (observational) data – the latest round of the Ghana Living Standards Survey (GLSS 7) – and food poverty thresholds at both national and international levels, household vulnerability to food poverty index was estimated following the vulnerability as expected poverty (VEP) model. The average treatment effect (ATT) of using mobile money to receive remittances for consumption on household vulnerability to food poverty was estimated by applying propensity score to matching techniques on scores and inverse probability weighting. The study found a differing effect of using mobile money to receive remittances on household vulnerability to food poverty between food-poor and non-food-poor households in Ghana. At the national food poverty line, radius, kernel and IPTW ATTs estimated at 5% significance level, respectively show that household vulnerability to food poverty is significantly lower for food-poor households that significantly used mobile money to receive remittances by 8.8%, 7.3%, and 4.4% index probabilities compared to non-mobile money users. On the other hand, non-food poor households that significantly used less mobile money channels to receive remittances for consumption may slightly experience high vulnerability to food poverty. The study also discovered that if exogenous factors raise the food poverty line to at least the international food poverty line, using mobile money to receive remittances will no longer significantly mitigate vulnerability to food poverty among food-poor households. The findings imply that we must proceed with caution before concluding that the adoption and use of mobile money reduce food poverty/insecurity. The linkages go beyond remittances and food consumption expenditures. Much depends on the extent of utilization of mobile money compared with non mobile money channels by food-poor and non-food-poor households and reciprocal altruistic cost effectiveness.