Sub-Sahara: GDP per capita and Internet Users
By Raulin Cadet | Published Oct. 23, 2023 | Updated Oct. 23, 2023 | Topics: GDP, Internet, Sub-sahara
How do the percentage of internet users and GDP per capita relate to one another? This post aims to provide an answer to this question, considering Sub-Saharan countries in 2021. Why is this issue crucial? Access to the internet makes it possible to find important information that might boost market efficiency and educational background. The internet can be used for training and as a library, in fact. The internet can help to boost market efficiency by lowering asymmetric information, since it offers a lot of information on prices, product quality and avaibility.
Concept: Asymmetric information occurs when one of two parties has more information than the other, during a transaction. The price chosen for the transaction is not its real value because the information is not symmetrical between the two parties. With this pricing, the party with more information will benefit more. A powerful tool for reducing asymmetric information can be the internet.
Several studies have shown a positive relationship between internet usage and GDP per capita. For instance, the study by Myovella and co-authors. shows how internet users have a positive impact on GDP per capita. By analyzing the scatter plot and trendline illustrating the connection between GDP per capita and the percentage of internet users in Sub-Saharan countries, it becomes evident that these indicators tend to increase in tandem. However, it's important to note that association or correlation does not imply causation. While the data suggests a positive relationship, various factors can influence GDP per capita, including access to education, infrastructure, and government policies. Nevertheless, as mention previously, several studies have shown that internet usage have a positive impact on GDP per capita.
It is possible that higher internet speed, in Sub-Saharan countries, induces more impact on GDP per capita.
