# **1. Introduction**

As the use of digital technologies expands in Sub-Saharan Africa, it is becoming more important to understand the effects of these technologies on welfare. The adoption of digital technologies—defined as “the Internet, mobile phones, and all the other tools to collect, store, analyze, and share information digitally” (World Bank 2016)—can potentially translate into economic opportunities among large numbers of people in the region. A small, but rapidly growing body of literature documents the positive impacts of Internet access on various outcomes of interest. Cross-national studies show, for instance, a positive relationship between economic development and the expansion of digital technologies in the form of increases in fixed broadband penetration rates (Czernich et al. 2011; García Zaballos and López-Rivas 2012; Qiang and Rossotto 2009). Studies also show that access to cellphone coverage improves employment, as well as welfare in terms of greater consumption and a reduction of poverty (Blumenstock et al. 2020; Klonner and Nolen 2010).

Most studies, however, focus almost exclusively on cellphone access, that is, second-generation (2G) technologies, and limited research on fixed broadband Internet.<sup>1</sup> Little is known about the effects of mobile broadband Internet—for instance, third-generation (3G) and fourth-generation (4G) technologies—on the welfare of individuals and households. This distinction is particularly important in the context of African countries, where a majority of people access the Internet through mobile phones rather than through fixed broadband Internet.<sup>2</sup> Recent evidence thus suggests that an expansion of fixed broadband Internet would enable more rapid job creation, more economic activity in Africa, and greater productivity and export growth among firms (Hjort and Poulsen 2019). New research also shows that the rollout of mobile broadband Internet has increased household consumption and reduced moderate and extreme poverty in Nigeria (Bahia et al. 2020).

This paper builds on the nascent literature on the welfare effects of mobile Internet in developing countries, and, in contrast to previous studies, it sheds light on the welfare impacts of both fixed and mobile broadband Internet coverage. Senegal has experienced a more rapid expansion in digital technologies over the past decade relative its peers, such as Côte d’Ivoire, Kenya, and Rwanda. A growing share of Senegalese have gained access to cellphone services and mobile and fixed broadband Internet. A recent report suggests that 98.7 percent of users access the Internet through mobile phones, emphasizing the importance of mobile broadband Internet in the country (ARTP 2019).

The study exploits the two most recent household budget surveys undertaken in Senegal: the 2011 Deuxième Enquête de Suivi de la Pauvreté au Sénégal (Second Poverty Monitoring Survey, ESPS-II) and the 2017–18 Enquête Légère Expérimentale sur la Pauvreté (2017–18 Light Experimental Poverty Assessment Survey, ELEPS). It integrates the data of these surveys with data on the expansion of mobile broadband coverage and fiber-optic network infrastructure to examine how the coverage of and proximity to digital infrastructure may influence household consumption and poverty status. It matches the locations of households—based on GPS coordinates of census enumeration areas (EAs, the primary sampling units)—with maps of terrestrial backbone networks and 2G and 3G coverage maps.<sup>3</sup> As discussed more extensively by Hjort and Poulsen (2019), the proximity of a given location

> 1 2G technologies enable voice, SMS, and limited Internet access, while third-generation (3G) technologies enable more rapid Internet browsing and data downloading.

> 2 The number of active mobile broadband subscriptions per 100 inhabitants in Africa in 2017 was 34.0, while the corresponding rate for fixed broadband subscriptions was 0.4 (ITU 2019).

> 3 Data on backbone networks have been taken from Africa Bandwidth Maps (database), Hamilton Research, Bath, UK,

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