Why Should Governments Support Broadband Adoption?
AbstractGovernments justify support of Internet diffusion on two grounds: (1) to overcome a persistent digital divide in broadband availability and (2) to facilitate online activities that are socially or economically desirable. This paper assesses both these claims. Using individual-level data from Forrester Research, the analysis finds significantly lower residential broadband adoption in lower-income and lower-density zip codes, controlling for individual characteristics. Further tests show that lower adoption in these areas is evidence of a persistent digital divide in availability. The analysis then assesses how broadband adoption changes individuals’ usage of online activities. Broadband adoption increases individuals’ frequency of researching health information online, but there is no evidence that broadband adoption increases usage of online job sites or online government services. Localities currently considering municipal wireless (Wi-Fi) initiatives should focus on digital divide justifications rather than expecting to raise usage of a wide range of online activities perceived to be socially desirable.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 3363.
Date of creation: Nov 2006
Date of revision:
broadband; Internet; digital divide; online; consumer behavior;
Other versions of this item:
- Jed Kolko, 2007. "Why Should Governments Support Broadband Adoption?," PPIC Working Papers 2007.01, Public Policy Institute of California.
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-06-11 (All new papers)
- NEP-ICT-2007-06-11 (Information & Communication Technologies)
- NEP-INO-2007-06-11 (Innovation)
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