Geography and the Internet: Is the Internet a Substitute or a Complement for Cities?
We study the tendency to connect to the Internet, and the online and offline shopping behavior of connected persons, to draw inferences about whether the Internet is a substitute or a complement for cities. We document that larger markets have more locally-targeted online content and that individuals are more likely to connect in markets with more local online content, suggesting the Internet is a complement to cities. Yet, holding local online content constant, people are less likely to connect in larger markets, indicating that the Internet is also a substitute for cities. We also find that individuals connect to overcome local isolation: notwithstanding a large digital divide, blacks are more likely to connect, relative to whites, when they comprise a smaller fraction of local population, making the Internet a substitute for agglomeration of preference minorities within cities. Finally, using online and offline spending data, we find that connected persons spend more on books and clothing online, relative to their offline spending, if they are farther from offline stores. This indicates that the Internet functions as a substitute for proximity to retail outlets.
|Date of creation:||Oct 2003|
|Date of revision:|
|Publication status:||published as Sinai, Todd and Joel Waldfogel. "Geography And The Internet: Is The Internet A Substitute Or A Complement For Cities?," Journal of Urban Economics, 2004, v56(1,Jul), 1-24.|
|Contact details of provider:|| Postal: |
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Shane Greenstein, 2000.
"Building and Delivering the Virtual World: Commercializing Services for Internet Access,"
NBER Working Papers
7690, National Bureau of Economic Research, Inc.
- Greenstein, Shane, 2000. "Building and Delivering the Virtual World: Commercializing Services for Internet Access," Journal of Industrial Economics, Wiley Blackwell, vol. 48(4), pages 391-411, December.
- Bresnahan, Timothy F & Reiss, Peter C, 1991.
"Entry and Competition in Concentrated Markets,"
Journal of Political Economy,
University of Chicago Press, vol. 99(5), pages 977-1009, October.
- Jess Gaspar & Edward L. Glaeser, 1996.
"Information Technology and the Future of Cities,"
Harvard Institute of Economic Research Working Papers
1756, Harvard - Institute of Economic Research.
- Lisa George & Joel Waldfogel, 2003. "Who Affects Whom in Daily Newspaper Markets?," Journal of Political Economy, University of Chicago Press, vol. 111(4), pages 765-784, August.
- Dixit, Avinash K & Stiglitz, Joseph E, 1975.
"Monopolistic Competition and Optimum Product Diversity,"
The Warwick Economics Research Paper Series (TWERPS)
64, University of Warwick, Department of Economics.
- Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
- Spence, Michael, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies, Wiley Blackwell, vol. 43(2), pages 217-35, June.
- Edward L. Glaeser, Jed Kolko, and Albert Saiz, 2001.
Journal of Economic Geography,
Oxford University Press, vol. 1(1), pages 27-50, January.
- Edward L. Glaeser & Jed Kolko & Albert Saiz, 2000. "Consumer City," Harvard Institute of Economic Research Working Papers 1901, Harvard - Institute of Economic Research.
- Ed Glaeser & Jed Kolko & Albert Saiz, 2000. "Consumer City," NBER Working Papers 7790, National Bureau of Economic Research, Inc.
- Antonio Ciccone & Robert E. Hall, 1995.
"Productivity and the density of economic activity,"
Economics Working Papers
120, Department of Economics and Business, Universitat Pompeu Fabra.
- Joel Waldfogel, 1999.
"Preference Externalities: An Empirical Study of Who Benefits Whom in Differentiated Product Markets,"
NBER Working Papers
7391, National Bureau of Economic Research, Inc.
- Waldfogel, Joel, 2003. " Preference Externalities: An Empirical Study of Who Benefits Whom in Differentiated-Product Markets," RAND Journal of Economics, The RAND Corporation, vol. 34(3), pages 557-68, Autumn.
- Spence, Michael, 1976. "Product Differentiation and Welfare," American Economic Review, American Economic Association, vol. 66(2), pages 407-14, May.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:10028. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.