Last updated on August 16, 2011
From a post by David Aronson on the Congo Resources blog:
“One thought occurred to me: Cell phone minutes. Cell phones are pretty ubiquitous, at least in town. Most people don’t have monthly plans. Instead, they buy cell phone minutes in increments of one to five dollars at a time. When people aren’t doing so well, they purchase fewer of those minutes. When they’re flush, they purchase more. As a proxy for economic trends, then, minutes have several advantages. They aren’t a requirement of life, like rent or food. But neither are they a lagging indicator, the result of pre-existing contracts and commitments, in the way that labor costs might be. Instead, they reflect how well people feel they are doing at the very moment the minutes are purchased. They are, to use an economic term I probably have no business using, highly elastic.”
This is not a bad idea, and it may be a pretty cheap measure of community-level welfare, but it also suffers from some of the same drawbacks as food expenditures.
That is, people may stock up on cell phone minutes when they expect harder times, and they may purchase more (or less) cell phone minutes when they expect the price of cell phone minutes to increase. In other words, prepaid cell phone minutes are also likely to be subject to speculation.
I would also think that the fact that some people use cell phone minutes as a store of value would complicate things — I’ve once heard a story of a lady who paid a ransom for her kidnapped daughter by transferring minutes to the cell phone belonging to an accomplice of the kidnapper.