Investigating the Impact Information and Communication Technology and Misery Index on Poverty with Panel Data

Purpose: Poverty is a complex issue with social and economic dimensions, recognized by international organizations such as the World Health Organization, the International Labour Organization, and the Food and Agriculture Organization (FAO). These organizations actively work to reduce and eradicate poverty. Amartya Sen's capability approach suggests measuring poverty as a deprivation of basic capabilities rather than merely focusing on income. In the context of technological advancements, particularly in information and communication technology (ICT), there is significant potential for ICT to contribute to poverty reduction. Information and Communication Technology (ICT) can improve access to health information, government services, employment opportunities, education, and support for economically disadvantaged individuals. Understanding the relationship between poverty and ICT is essential.
Method: This research aims to explore the impact of information and communication technology (ICT) and economic variables on poverty. It utilizes a combination of data to examine the correlation between ICT and macroeconomic factors. The analysis involves studying time series observations across various sectors using a fixed effects model with pooled data. The model is evaluated using the Lagrange coefficient test developed by Brosh and Pagan. The model incorporates the penetration rate of mobile technology as a proxy for information and communication technology (ICT), along with macroeconomic variables such as inflation and unemployment, which together constitute the misery index. Additionally, per capita income is regarded as a macroeconomic variable that influences poverty. The model can be expressed as follows: P=F (ICT, MI, PI). The poverty indicator is denoted by the symbol P, while the information and communication technology variable is represented by Fava ICT. The misery index, which incorporates variables such as inflation and unemployment, is denoted as MI. The macroeconomic variable representing per capita income is symbolized as PI. The study focuses on a statistical population of 36 countries selected for their similarities in economic, political, and social characteristics. The selected countries ensure comparability and control for potential confounding factors. The study covers the years 2000 to 2021, allowing for an analysis of long-term trends and relationships among poverty, information and communication technology, macroeconomic variables, and per capita income in these countries.
Finding: The significant levels of all variables in the model indicate that false regression is not a concern. This suggests that the observed relationships in the analysis are statistically meaningful and not merely due to chance. The F-Limer test confirms the appropriateness of using panel data by indicating the presence of a panel structure within the dataset. This allows for the consideration of both cross-sectional and time-series dimensions. The Hausman test supports the use of random effects in the model, indicating that unobserved individual-specific effects do not significantly influence
the estimated coefficients. The analysis results confirm the existence of a relationship between information and communication technology, the misery index, per capita income, and poverty levels. Specifically, the misery index and information technology demonstrate the most significant impact and are statistically significant. These findings underscore the importance of addressing economic distress, promoting technological advancements, and enhancing income levels as potential strategies for poverty reduction. It is important to note that the specific magnitudes and significance levels of the effects may vary depending on the statistical techniques and model specifications used in the analysis.
Conclusion: Governments can play a crucial role in alleviating poverty by investing in information and communication technology (ICT) infrastructure and creating an environment that encourages private sector participation. Allocating and securing financial resources is essential for supporting the development and implementation of ICT initiatives. Policy-making should be informed by comprehensive research and analysis to identify the specific needs and priorities of each country. This approach will lead to the development of effective policies that align with goals for poverty reduction and socioeconomic development. Additionally, the establishment of laws and regulations can guide the implementation of ICT initiatives, ensuring their effectiveness and sustainability. Regular evaluations and assessments are essential for monitoring progress and impact, allowing for necessary adjustments. It is unfortunate that some countries, including those that are economically and socially close to Iran, may depend on imitation and replication instead of adopting comprehensive approaches to ICT development. Governments should acknowledge their distinct contexts and challenges, formulating customized strategies to effectively leverage the potential of Information and Communication Technology (ICT) in poverty alleviation and sustainable development.