IDEAS home Printed from https://ideas.repec.org/a/aea/jecper/v34y2020i2p192-214.html
   My bibliography  Save this article

The Basic Economics of Internet Infrastructure

Author

Listed:
  • Shane Greenstein

Abstract

The internet's structure and operations remain invisible to most economists. What determines the economic value of internet infrastructure and the incentives to improve it? What are the open research questions for the most salient policy issues? This article reviews the basic economics of internet infrastructure, focusing attention on the economic questions motivated by public aspirations for ubiquitous availability and widespread adoption of internet protocols.

Suggested Citation

  • Shane Greenstein, 2020. "The Basic Economics of Internet Infrastructure," Journal of Economic Perspectives, American Economic Association, vol. 34(2), pages 192-214, Spring.
    • Handle: RePEc:aea:jecper:v:34:y:2020:i:2:p:192-214
    DOI: 10.1257/jep.34.2.192
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/jep.34.2.192
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/jep.34.2.192.ds
    Download Restriction: no
    File URL: https://libkey.io/10.1257/jep.34.2.192?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Boik, Andre, 2017. "The economics of universal service: An analysis of entry subsidies for high speed broadband," Information Economics and Policy, Elsevier, vol. 40(C), pages 13-20.
    2. Chad Syverson, 2017. "Challenges to Mismeasurement Explanations for the US Productivity Slowdown," Journal of Economic Perspectives, American Economic Association, vol. 31(2), pages 165-186, Spring.
    3. Shane Greenstein & Martin Peitz & Tommaso Valletti, 2016. "Net Neutrality: A Fast Lane to Understanding the Trade-Offs," Journal of Economic Perspectives, American Economic Association, vol. 30(2), pages 127-150, Spring.
    4. Aviv Nevo & John L. Turner & Jonathan W. Williams, 2016. "Usage‐Based Pricing and Demand for Residential Broadband," Econometrica, Econometric Society, vol. 84, pages 411-443, March.
    5. David Byrne & Carol Corrado, 2020. "Accounting for Innovations in Consumer Digital Services: IT Still Matters," NBER Chapters, in: Measuring and Accounting for Innovation in the Twenty-First Century, pages 471-517, National Bureau of Economic Research, Inc.
    6. Zhuo, Ran & Huffaker, Bradley & claffy, kc & Greenstein, Shane, 2021. "The impact of the General Data Protection Regulation on internet interconnection," Telecommunications Policy, Elsevier, vol. 45(2).
    7. DeStefano, Timothy & Kneller, Richard & Timmis, Jonathan, 2018. "Broadband infrastructure, ICT use and firm performance: Evidence for UK firms," Journal of Economic Behavior & Organization, Elsevier, vol. 155(C), pages 110-139.
    8. Robert C. Seamans, 2012. "Fighting City Hall: Entry Deterrence and Technology Upgrades in Cable TV Markets," Management Science, INFORMS, vol. 58(3), pages 461-475, March.
    9. Milton L. Mueller, 2004. "Ruling the Root: Internet Governance and the Taming of Cyberspace," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262632985, December.
    10. Martin Feldstein, 2017. "Underestimating the Real Growth of GDP, Personal Income, and Productivity," Journal of Economic Perspectives, American Economic Association, vol. 31(2), pages 145-164, Spring.
    11. Shane M. Greenstein & Avi Goldfarb & Catherine Tucker (ed.), 2013. "The Economics of Digitization," Books, Edward Elgar Publishing, number 15002.
    12. Yongmin Chen & Scott J Savage, 2011. "The Effects of Competition on the Price for Cable Modem Internet Access," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 201-217, February.
    13. Erica L. Groshen & Brian C. Moyer & Ana M. Aizcorbe & Ralph Bradley & David M. Friedman, 2017. "How Government Statistics Adjust for Potential Biases from Quality Change and New Goods in an Age of Digital Technologies: A View from the Trenches," Journal of Economic Perspectives, American Economic Association, vol. 31(2), pages 187-210, Spring.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xian Jiang, 2023. "Information and Communication Technology and Firm Geographic Expansion," CESifo Working Paper Series 10452, CESifo.
    2. Trung Thanh Nguyen & Manh Hung Do, 2022. "Female rural–urban migrants and online marketplaces in emerging economies: Evidence from Thailand and Vietnam," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 9(3), pages 317-342, September.
    3. Salome Baslandze & Jeremy Greenwood & Ricardo Marto & Sara Moreira, 2023. "The Expansion of Varieties in the New Age of Advertising," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 50, pages 171-210, October.
    4. Ren, Siyu & Hao, Yu & Xu, Lu & Wu, Haitao & Ba, Ning, 2021. "Digitalization and energy: How does internet development affect China's energy consumption?," Energy Economics, Elsevier, vol. 98(C).
    5. Martínez-Domínguez, Marlen & Fierros-González, Isael, 2022. "Determinants of internet use by school-age children: The challenges for Mexico during the COVID-19 pandemic," Telecommunications Policy, Elsevier, vol. 46(1).
    6. David M. Byrne, 2022. "The Digital Economy and Productivity," Finance and Economics Discussion Series 2022-038, Board of Governors of the Federal Reserve System (U.S.).
    7. Karim, Mohammed Shamsul & Nahar, Sharmin & Demirbag, Mehmet, 2022. "Resource-Based Perspective on ICT Use and Firm Performance: A Meta-analysis Investigating the Moderating Role of Cross-Country ICT Development Status," Technological Forecasting and Social Change, Elsevier, vol. 179(C).
    8. Leka, Enxhi, 2022. "What Should Economists Know About the Cloud? A Literature Review on Digital Economics," 31st European Regional ITS Conference, Gothenburg 2022: Reining in Digital Platforms? Challenging monopolies, promoting competition and developing regulatory regimes 265651, International Telecommunications Society (ITS).
    9. Simone Vannuccini & Ekaterina Prytkova, 2021. "Artificial Intelligence’s New Clothes? From General Purpose Technology to Large Technical System," SPRU Working Paper Series 2021-02, SPRU - Science Policy Research Unit, University of Sussex Business School.
    10. Glass Victor, 2019. "The Net Neutrality Debate is Outdated: Time for a New Wider View," Review of Network Economics, De Gruyter, vol. 18(4), pages 243-276, December.
    11. Andrea Coveri & Claudio Cozza & Dario Guarascio, 2023. "Blurring boundaries: an analysis of the digital platforms-military nexus," LEM Papers Series 2023/47, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    12. Kyle Wilson & Mo Xiao & Peter F. Orazem, 2021. "Entry threat, entry delay, and Internet speed: The timing of the U.S. broadband rollout," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 30(1), pages 3-44, February.
    13. Bonani, Michela, 2023. "Essays on innovation, cooperation, and competition under standardization," Other publications TiSEM 1c87d7fc-2c24-430a-9d4e-1, Tilburg University, School of Economics and Management.
    14. Shaengchart, Yarnaphat & Kraiwanit, Tanpat & Butcharoen, Smich, 2023. "Factors influencing the effects of the Starlink Satellite Project on the internet service provider market in Thailand," Technology in Society, Elsevier, vol. 74(C).
    15. Fanlue Li & Ke He & Run Zhu & Junbiao Zhang & Ming Gao, 2023. "Rural low‐carbon energy development in the information age: Can internet access drive the farmer to participate in personal carbon trading schemes related to bioenergy?," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(3), pages 1417-1432, June.
    16. Fang, Zhen & Razzaq, Asif & Mohsin, Muhammad & Irfan, Muhammad, 2022. "Spatial spillovers and threshold effects of internet development and entrepreneurship on green innovation efficiency in China," Technology in Society, Elsevier, vol. 68(C).
    17. Chaturvedi, Rakesh & Dutta, Souvik & Kanjilal, Kiriti, 2021. "An economic model of the last-mile internet," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 620-638.
    18. Trung Thanh Nguyen & Manh Hung Do, 2022. "Female migrants and online market participation in rural Southeast Asia," TVSEP Working Papers wp-026, Leibniz Universitaet Hannover, Institute of Development and Agricultural Economics, Project TVSEP.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shane Greenstein, 2020. "Digital Infrastructure," NBER Chapters, in: Economic Analysis and Infrastructure Investment, pages 409-447, National Bureau of Economic Research, Inc.
    2. Diewert, Erwin & FOX, Kevin J. Fox & SCHREYER, Paul, 2017. "The Digital Economy, New Products and Consumer Welfare," Microeconomics.ca working papers erwin_diewert-2017-12, Vancouver School of Economics, revised 14 Dec 2017.
    3. Brynjolfsson, Erik & Collis, Avinash & Diewert, W. Erwin & Eggers, Felix & Fox, Kevin J., 2019. "GDP-B: Accounting for the Value of New and Free Goods in the Digital Economy," OSF Preprints sptfu, Center for Open Science.
    4. Watanabe, Chihiro & Tou, Yuji & Neittaanmäki, Pekka, 2018. "A new paradox of the digital economy - Structural sources of the limitation of GDP statistics," Technology in Society, Elsevier, vol. 55(C), pages 9-23.
    5. Salverda, Wiemer & Thewissen, Stefan, 2017. "How has the middle fared in the netherlands? A tale of stagnation and population shifts," INET Oxford Working Papers 2017-14, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    6. Niebel, Thomas, 2019. "Wachstumsperspektiven der digitalen Transformation: Wird der ökonomische Mehrwert der Digitalisierung in der Volkswirtschaftlichen Gesamtrechnung angemessen abgebildet?," Working Paper Forschungsförderung 142, Hans-Böckler-Stiftung, Düsseldorf.
    7. Nicholas Crafts, 2017. "Is Slow Economic Growth the ‘New Normal’ for Europe?," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 45(3), pages 283-297, September.
    8. Diewert, Erwin & Fox, Kevin J., 2019. "Productivity Indexes and National Statistics: Theory, Methods and Challenges," Microeconomics.ca working papers erwin_diewert-2019-8, Vancouver School of Economics, revised 25 Apr 2019.
    9. John A. Romley & Dana Goldman & Neeraj Sood & Abe C. Dunn, 2019. "Quantifying Productivity Growth in the Delivery of Important Episodes of Care Within the Medicare Program Using Insurance Claims and Administrative Data," BEA Papers 0111, Bureau of Economic Analysis.
    10. Landgraf, Steven W., 2020. "Entry threats from municipal broadband Internet and impacts on private provider quality," Information Economics and Policy, Elsevier, vol. 52(C).
    11. Anna M. Stansbury & Lawrence H. Summers, 2017. "Productivity and Pay: Is the link broken?," NBER Working Papers 24165, National Bureau of Economic Research, Inc.
    12. Anderton, Robert & Jarvis, Valerie & Labhard, Vincent & Morgan, Julian & Petroulakis, Filippos & Vivian, Lara, 2020. "Virtually everywhere? Digitalisation and the euro area and EU economies," Occasional Paper Series 244, European Central Bank.
    13. Szabó, Andrea & Pham, Vinh, 2022. "Net neutrality and consumer demand in the video on-demand market," Information Economics and Policy, Elsevier, vol. 61(C).
    14. Gene M. Grossman & Elhanan Helpman & Ezra Oberfield & Thomas Sampson, 2017. "The productivity slowdown and the declining labor share: a neoclassical exploration," CEP Discussion Papers dp1504, Centre for Economic Performance, LSE.
    15. Nicholas Oulton, 2018. "GDP and the System of National Accounts: Past, Present and Future," Discussion Papers 1802, Centre for Macroeconomics (CFM), revised Jun 2018.
    16. Razzak, Weshah, 2017. "International Productivity Growth Differentials Sectoral Analysis and Missing Productivity," MPRA Paper 84967, University Library of Munich, Germany, revised 06 Mar 2018.
    17. Josh Martin & Rebecca Riley, 2023. "Productivity measurement - Reassessing the production function from micro to macro," Working Papers 033, The Productivity Institute.
    18. Mo Abdirahman & Diane Coyle & Richard Heys & Will Stewart, 2020. "A Comparison of Deflators for Telecommunications Services Output," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 517-518-5, pages 103-122.
    19. Abe Dunn & Anne Hall & Seidu Dauda, 2022. "Are Medical Care Prices Still Declining? A Re‐Examination Based on Cost‐Effectiveness Studies," Econometrica, Econometric Society, vol. 90(2), pages 859-886, March.
    20. Erik Brynjolfsson & Avinash Collis & Felix Eggers, 2019. "Using massive online choice experiments to measure changes in well-being," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 116(15), pages 7250-7255, April.

    More about this item

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L88 - Industrial Organization - - Industry Studies: Services - - - Government Policy
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:jecper:v:34:y:2020:i:2:p:192-214. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.