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Internet and income inequality: A research note

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  • Yongzheng Liu

    () (Renmin University of China)

Abstract

By using a sample of 51 developed and developing countries, this research note empirically examines the impact of internet diffusion on income inequality. To address the potential endogeneity issue of internet diffusion, I employ lightning density as an instrument for internet diffusion and use an instrumental variable method for the estimations. I find that internet diffusion significantly reduces income inequality. The results are robust across alternative specifications.

Suggested Citation

  • Yongzheng Liu, 2017. "Internet and income inequality: A research note," Economics Bulletin, AccessEcon, vol. 37(4), pages 2846-2853.
  • Handle: RePEc:ebl:ecbull:eb-17-00674
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    References listed on IDEAS

    as
    1. Lentz, R. G. & Oden, Michael D., 2001. "Digital divide or digital opportunity in the Mississippi Delta region of the US," Telecommunications Policy, Elsevier, vol. 25(5), pages 291-313, June.
    2. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    3. Daniel R. Feenberg & James M. Poterba, 1993. "Income Inequality and the Incomes of Very High-Income Taxpayers: Evidence from Tax Returns," NBER Chapters,in: Tax Policy and the Economy, Volume 7, pages 145-177 National Bureau of Economic Research, Inc.
    4. Jeffrey R. Brown & Austan Goolsbee, 2002. "Does the Internet Make Markets More Competitive? Evidence from the Life Insurance Industry," Journal of Political Economy, University of Chicago Press, vol. 110(3), pages 481-507, June.
    5. Bourguignon, Francois & Morrisson, Christian, 1998. "Inequality and development: the role of dualism," Journal of Development Economics, Elsevier, vol. 57(2), pages 233-257.
    6. H. Naci Mocan, 1999. "Structural Unemployment, Cyclical Unemployment, and Income Inequality," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 122-134, February.
    7. Robert E. Litan & Alice M. Rivlin, 2001. "Projecting the Economic Impact of the Internet," American Economic Review, American Economic Association, vol. 91(2), pages 313-317, May.
    8. Blejer, Mario I & Guerrero, Isabel, 1990. "The Impact of Macroeconomic Policies on Income Distribution: An Empirical Study of the Philippines," The Review of Economics and Statistics, MIT Press, vol. 72(3), pages 414-423, August.
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    More about this item

    Keywords

    Internet diffusion; Income inequality; Endogeneity;

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • L8 - Industrial Organization - - Industry Studies: Services

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