Does IT Lead to More Equal Treatment? An Empirical Study of the Effect of Smartphone Use on Customer Complaint Resolution

Abstract

Customers with more education may get better service after complaining, because they are better placed to advocate for themselves. It is unclear how digitization of the consumer complaint process will change this situation. To investigate this, we analyze 364,189 customer complaints to the city of Boston. Empirically, complaints that originate from areas with high levels of education are more likely to be solved quickly. However, dedicated mobile app technologies that automate the complaint process can help mitigate the advantage conferred by education. Since the adoption of digital devices is endogenous to wealth and education, we instrument their usage using granular geographic data on a proxy for cellular signal strength. This analysis again suggests that mobile applications can partially eliminate the disparity between educated and uneducated people. We present suggestive evidence that this is because mobile devices and the standardization of communication they require, eliminate potential differences in treatment of cases that arise due to differences in communication skills. This result suggests that using newer forms of automated digital communication tools enhances equality in customer service.