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Econometric error nullifies finding of the impact of broadband speed on county-level employment

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  • Whitacre, Brian E.
  • Alam, Md Rafayet
  • Lobo, Bento J.

Abstract

In a 2017 Information Economics and Policy article, Bai (2017) used a pooled first-differenced regression to find a positive relationship between broadband availability and the county-level employment rate for 8 states between 2011 and 2014. Upon further investigation, these results were driven by an error that inappropriately calculated differences across counties (and years) in the dataset. This error has been acknowledged by the author. When corrected, the specification in the original paper produces no statistical significance for any of the broadband variables of interest. Thus, the reported finding of a positive association between broadband speed and employment is not valid. This updated result is in agreement with several other studies using the first-differenced methodology and county-level data from the U.S., and suggests that more work needs to be done to refine existing models and units of analysis to uncover the relationship (if one exists) between broadband speed and employment.

Suggested Citation

  • Whitacre, Brian E. & Alam, Md Rafayet & Lobo, Bento J., 2018. "Econometric error nullifies finding of the impact of broadband speed on county-level employment," Information Economics and Policy, Elsevier, vol. 44(C), pages 58-60.
    • Handle: RePEc:eee:iepoli:v:44:y:2018:i:c:p:58-60
    DOI: 10.1016/j.infoecopol.2018.05.001
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    References listed on IDEAS

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    1. Narine Badasyan & David Shideler & Laura Taylor, 2007. "The economic impact of broadband deployment in Kentucky," Regional Economic Development, Federal Reserve Bank of St. Louis, issue Nov, pages 88-118.
    2. Kolko, Jed, 2012. "Broadband and local growth," Journal of Urban Economics, Elsevier, vol. 71(1), pages 100-113.
    3. Bai, Yang, 2017. "The faster, the better? The impact of internet speed on employment," Information Economics and Policy, Elsevier, vol. 40(C), pages 21-25.
    4. Nina Czernich & Oliver Falck & Tobias Kretschmer & Ludger Woessmann, 2011. "Broadband Infrastructure and Economic Growth," Economic Journal, Royal Economic Society, vol. 121(552), pages 505-532, May.
    5. repec:oup:ajagec:v:99:y:2017:i:1:p:1-18. is not listed on IDEAS
    6. Mack, Elizabeth A. & Rey, Sergio J., 2014. "An econometric approach for evaluating the linkages between broadband and knowledge intensive firms," Telecommunications Policy, Elsevier, vol. 38(1), pages 105-118.
    7. Czernich, Nina, 2014. "Does broadband internet reduce the unemployment rate? Evidence for Germany," Information Economics and Policy, Elsevier, vol. 29(C), pages 32-45.
    8. Brian Whitacre & Roberto Gallardo & Sharon Strover, 2014. "Does rural broadband impact jobs and income? Evidence from spatial and first-differenced regressions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(3), pages 649-670, November.
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    Cited by:

    1. Craig W. Carpenter & Anders Van Sandt & Rebekka Dudensing & Scott Loveridge, 2022. "Profit Pools and Determinants of Potential County-Level Manufacturing Growth," International Regional Science Review, , vol. 45(2), pages 188-224, March.
    2. Lindlacher, Valentin, 2021. "Low demand despite broad supply: Is high-speed Internet an infrastructure of general interest?," Information Economics and Policy, Elsevier, vol. 56(C).
    3. Gary A. Wagner & Hyun Ji Lee, 2024. "Does broadband affect local economic outcomes less than we thought? Micro evidence from Louisiana," Contemporary Economic Policy, Western Economic Association International, vol. 42(1), pages 68-93, January.
    4. Briglauer, Wolfgang & Stocker, Volker, 2020. "Bedeutung digitaler Infrastrukturen und Dienste und Maßnahmen zur Förderung der Resilienz in Krisenzeiten," Policy Notes 42, EcoAustria – Institute for Economic Research.
    5. Lobo, Bento J. & Alam, Md Rafayet & Whitacre, Brian E., 2020. "Broadband speed and unemployment rates: Data and measurement issues," Telecommunications Policy, Elsevier, vol. 44(1).
    6. Biedny, Christina & Whitacre, Brian & Gallardo, Roberto, 2022. "Do ‘dig once’ and permitting policies improve fiber availability?," Telecommunications Policy, Elsevier, vol. 46(5).

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