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Is faster better? Quantifying the relationship between broadband speed and economic growth

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  • Ford, George S.

Abstract

In this paper, I aim to quantify the relationship between higher broadband speeds (10 Mbps versus 25 Mbps) and the growth rates in important economic outcomes in U.S. counties including jobs, personal income, and labor earnings. Doing so exposes the potential for severe selection bias in studies of broadband's economic impact, which is addressed in this study using Coarsened Exact Matching. Once balanced, the data reveal no economic payoff from the 15 Mbps speed difference between the years 2013 and 2015 (when data is available). I also revisit an early and widely-cited study on broadband's effect on employment to evaluate the possible impacts of selection bias, and conclude that the positive benefits of broadband reported in that particular study are likely spurious. The selection bias problem may infect other studies on the economic impacts of broadband Internet services. Future research on broadband's economic impact should explicitly address selection bias.

Suggested Citation

  • Ford, George S., 2018. "Is faster better? Quantifying the relationship between broadband speed and economic growth," Telecommunications Policy, Elsevier, vol. 42(9), pages 766-777.
    • Handle: RePEc:eee:telpol:v:42:y:2018:i:9:p:766-777
    DOI: 10.1016/j.telpol.2018.05.006
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    Cited by:

    1. Abdulqadir, Idris & Asongu, Simplice, 2021. "The asymmetric effect of internet access on economic growth in sub-Saharan Africa: Insight from a dynamic panel threshold regression," MPRA Paper 109904, University Library of Munich, Germany.
    2. Yifeng Philip Chen & Edward J. Oughton & Jakub Zagdanski & Maggie Mo Jia & Peter Tyler, 2023. "Crowdsourced data indicates broadband has a positive impact on local business creation," Papers 2308.14734, arXiv.org.
    3. Steven Deller & Brian Whitacre & Tessa Conroy, 2022. "Rural broadband speeds and business startup rates," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(3), pages 999-1025, May.
    4. Bauer, Anahid & Feir, Donn. L. & Gregg, Matthew T., 2022. "The tribal digital divide: Extent and Explanations," Telecommunications Policy, Elsevier, vol. 46(9).
    5. Abdulqadir, Idris A. & Asongu, Simplice A., 2022. "The asymmetric effect of internet access on economic growth in sub-Saharan Africa," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 44-61.
    6. Gary A. Wagner & Hyun Ji Lee, 2024. "Does broadband affect local economic outcomes less than we thought? Micro evidence from Louisiana," Contemporary Economic Policy, Western Economic Association International, vol. 42(1), pages 68-93, January.
    7. Falk, Martin & Hagsten, Eva, 2021. "Impact of high-speed broadband access on local establishment dynamics," Telecommunications Policy, Elsevier, vol. 45(4).
    8. Jung, Juan & López-Bazo, Enrique, 2020. "On the regional impact of broadband on productivity: The case of Brazil," Telecommunications Policy, Elsevier, vol. 44(1).
    9. Roberto Gallardo & Brian Whitacre & Indraneel Kumar & Sreedhar Upendram, 2021. "Broadband metrics and job productivity: a look at county-level data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(1), pages 161-184, February.
    10. Hasbi, Maude & Bohlin, Erik, 2021. "Impact of Broadband Quality on Median Income and Unemployment: Evidence from Sweden," 23rd ITS Biennial Conference, Online Conference / Gothenburg 2021. Digital societies and industrial transformations: Policies, markets, and technologies in a post-Covid world 238026, International Telecommunications Society (ITS).
    11. de Clercq, Michaël & D'Haese, Marijke & Buysse, Jeroen, 2023. "Economic growth and broadband access: The European urban-rural digital divide," Telecommunications Policy, Elsevier, vol. 47(6).
    12. Schmit, Todd M. & Severson, Roberta M., 2021. "Exploring the feasibility of rural broadband cooperatives in the United States: The new New Deal?," Telecommunications Policy, Elsevier, vol. 45(4).
    13. Lobo, Bento J. & Alam, Md Rafayet & Whitacre, Brian E., 2020. "Broadband speed and unemployment rates: Data and measurement issues," Telecommunications Policy, Elsevier, vol. 44(1).
    14. Ford, George S. & Alan Seals, R., 2021. "The rewards of municipal broadband: An econometric analysis of the labor market," Telecommunications Policy, Elsevier, vol. 45(8).
    15. Deller, Steven & Whitacre, Brian, 2018. "Broadband’s Relationship to Rural Housing Values," Staff Paper Series 591, University of Wisconsin, Agricultural and Applied Economics.
    16. Lindlacher, Valentin, 2021. "Low demand despite broad supply: Is high-speed Internet an infrastructure of general interest?," Information Economics and Policy, Elsevier, vol. 56(C).
    17. George Charalampopoulos & Dimitris Katsianis & Dimitris Varoutas, 2022. "Economic replicability tests: an “out-of-the-box” implementation," Netnomics, Springer, vol. 22(2), pages 115-138, October.
    18. Abrardi, Laura & Cambini, Carlo, 2019. "Ultra-fast broadband investment and adoption: A survey," Telecommunications Policy, Elsevier, vol. 43(3), pages 183-198.
    19. Vitor Miguel Ribeiro & Lei Bao, 2021. "Impact of next‐generation access networks on the innovation efficiency of Portuguese municipalities: A spatial econometrics approach," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(5), pages 1615-1637, October.
    20. Bauer, Anahid & Feir, Donn. L. & Gregg, Matthew T., 2022. "The tribal digital divide: Extent and Explanations," Telecommunications Policy, Elsevier, vol. 46(9).
    21. Suárez, David & García-Mariñoso, Begoña, 2021. "Does ad blocking have an effect on online shopping?," Telecommunications Policy, Elsevier, vol. 45(3).
    22. Philip Chen & Edward J Oughton & Pete Tyler & Mo Jia & Jakub Zagdanski, 2020. "Evaluating the impact of next generation broadband on local business creation," Papers 2010.14113, arXiv.org.
    23. Gómez-Barroso, José Luis & Marbán-Flores, Raquel, 2020. "Telecommunications and economic development – The 21st century: Making the evidence stronger," Telecommunications Policy, Elsevier, vol. 44(2).
    24. Biedny, Christina & Whitacre, Brian & Gallardo, Roberto, 2022. "Do ‘dig once’ and permitting policies improve fiber availability?," Telecommunications Policy, Elsevier, vol. 46(5).

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