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High-speed Internet access and housing values

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  • Gabor Molnar
  • Scott J. Savage
  • Douglas C. Sicker

Abstract

A hedonic model is estimated that relates house values to high-speed Internet access while controlling for the potential endogeneity of Internet access. Results show that single-family homes with access to a 25 Mbps broadband connection have a price that is about $5,977, or 3%, more than similar homes in neighborhoods with 1 Mbps. The rural premium is lower at $5,099. A cost-benefit exercise on the viability of rural broadband shows that demand will generally not support private investment, but that the revenue gap from upgrading legacy networks could be readily covered by the Universal Service Fund and other public subsidies.

Suggested Citation

  • Gabor Molnar & Scott J. Savage & Douglas C. Sicker, 2019. "High-speed Internet access and housing values," Applied Economics, Taylor & Francis Journals, vol. 51(55), pages 5923-5936, November.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:55:p:5923-5936
    DOI: 10.1080/00036846.2019.1631443
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    Cited by:

    1. Klein, Gordon J., 2022. "Fiber-broadband-internet and its regional impact—An empirical investigation," Telecommunications Policy, Elsevier, vol. 46(5).
    2. Han, Luyi & Wojan, Timothy R. & Goetz, Stephan J., 2023. "Experimenting in the cloud: The digital divide's impact on innovation," Telecommunications Policy, Elsevier, vol. 47(7).
    3. Worden, David & Hambly, Helen, 2022. "Willingness to pay and pricing for broadband across the rural/urban divide in Canada," Telecommunications Policy, Elsevier, vol. 46(2).

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