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Efficiency of broadband internet adoption in European Union member states

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  • Pavlyuk, Dmitry

Abstract

This paper is devoted to econometric analysis of broadband adoption efficiency in EU member states. Stochastic frontier models are widely used for efficiency estimation. We enhanced the stochastic frontier model by adding a spatial component into the model specification to reflect possible dependencies between neighbour countries. A maximum likelihood estimator for the model was developed. The proposed spatial autoregressive stochastic frontier model is used for estimation of broadband adoption efficiency. We confirmed a negative impact of average prices of broadband services on broadband adoption in a country and also discovered a significant negative influence of a level of population income inequality. Significant positive spatial effects also have been revealed, so higher broadband penetration rates in neighbour countries have a positive impact on broadband adoption in a given country.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 34183.

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Date of creation: 30 Jun 2011
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Handle: RePEc:pra:mprapa:34183

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Keywords: spatial stochastic frontier; broadband adoption; efficiency;

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  1. Alexandra M. Schmidt & Ajax R. B. Moreira & Thais C. O. Fonseca & Steven M. Helfand, 2006. "Spatial Stochastic Frontier Models: accounting for unobserved local determinants of inefficiency," Discussion Papers 1220, Instituto de Pesquisa Econômica Aplicada - IPEA.
  2. Erniel B. Barrios & Rouselle F. Lavado, 2010. "Spatial Stochastic Frontier Models," Microeconomics Working Papers 23091, East Asian Bureau of Economic Research.
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