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Disentangling income and price effects in the demand for time online

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  • González Chapela, Jorge

Abstract

The large negative impact of income on time spent online observed among internet adopters has been interpreted as an own-price effect created by the variation in the opportunity cost of time across income strata. However, the regression coefficient on income could also be capturing an income effect. This paper estimates a standard demand function for time online in Spain that includes a measure of the opportunity cost of time in addition to a measure of income. The effect of income barely changed when the opportunity cost of time was included. Results rather suggest that time spent online is an inferior leisure activity.

Suggested Citation

  • González Chapela, Jorge, 2016. "Disentangling income and price effects in the demand for time online," Information Economics and Policy, Elsevier, vol. 35(C), pages 65-75.
  • Handle: RePEc:eee:iepoli:v:35:y:2016:i:c:p:65-75
    DOI: 10.1016/j.infoecopol.2015.10.004
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    More about this item

    Keywords

    Internet usage; Opportunity cost of time; Spanish Time Use Survey; Type II Tobit model;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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