Press Room Vacancies at Bidpa Disclaimer Contact us
Publication  
Annual reports  
BIDPA Briefing  
BIDPA Profile  
Books  
Journals  
Newsletters  
Policy Briefs  
Working papers  
 
 
Detail

The Relationship Between Electronic-Money Penetration and Household Consumption: VECM Granger Causality Analysis
bidpa

In Botswana, the advancement of e-money is highly associated with the forces of consumer demand and the supply of e-money products in the market. However, the impacts of e-money on household consumption are not known. This paper, therefore, examines the c

Research Group
 Micro Economics

Date
  31th May 2018

Author
 Masedi K. Tshukudu

Keywords
  Causality; Electronic money; Household consumption

Document
  Download

statement

The development and use of Electronic Money (e-money) remain one of the most discussed topics in developing countries, yet literature on the relationship between e-money penetration and household consumption remains negligible. Available literature confirms that e-money penetration has a significant impact on economic activity in both developed and emerging economies. In Botswana, the advancement of e-money is highly associated with the forces of consumer demand and the supply of e-money products in the market. However, the impacts of e-money on household consumption are not known. This paper, therefore, examines the causal link between e-money (EM) penetration and Household Consumption (HC) using quarterly data over the period 2007-2017. The study uses Granger causality test based on the Vector Error Correction Model. The empirical results provide evidence of the causal impact of household consumption on e-money penetration in Botswana only in the short-run. In addition, the empirical results also confirm that if the use of electronic payment technologies is developed in the long-run, e-money penetration would predict household consumption in Botswana. It can be concluded that the growth impact of e-money on household consumption is still insignificant in Botswana, but in the long-run the use of e-money technologies can impact household consumption. It is therefore, important that the government and financial service providers continue to provide a more conducive environment to increase the electronic payment outlets.
 


News
main news heading
As part of the strategy development process BIDPA held a one-day strategy validation workshop for Board of Trustees and Board sub-committees’ members on 5th July 2018, in Kasane....Read more
 
Front page news
BIDPA TAKES A NEW STRATEGIC DIRECTION
The Botswana Institute for Development Policy Analysis, (BIDPA) will in the next five years focus on five research areas aimed at providing research evidence for the formulation, implementation and review of national development policies. ..Read more
Hunhukwe Primary School appreciates BIDPA support
The 2019 Hunhukwe Primary School Performance Awards ceremony was held on 26th September. ..Read more
BIDPA strives to maintain its position as the top-ranked Think Tank in Sun-Saharan Africa
The Botswana Institute for Development Policy Analysis (BIDPA) has been ranked the best think tank in Sub Saharan Africa. This is according to the 2018 Global Go To Think Tank Index Report...Read more
 
BIDPA House
Plot 134 Tshwene Drive International Finance Park Private Bag BR-29 Gaborone Botswana
Tel: (+267) 3971750 Fax: (+267) 3971748 Email: webmaster@bidpa.bw
Designed and Developed by Weblogic