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Network Economics and the Digital Divide in Rural India


  • Jake Kendall

    () (University of California Santa Cruz)

  • Nirvikar Singh

    () (University of California Santa Cruz)

  • Kristin Williams

    () (University of California Santa Cruz)

  • Yan Zhou

    () (California State University, Sacramento)

  • P.D. Kaushik

    () (Rajiv Gandhi Institute of Contemporary Studies)


The idea of a ‘global digital divide’ is well accepted, and cross-country studies of determinants of differences in computer and Internet penetration have identified income, telecommunications infrastructure, and regulatory quality as key influencing factors. The policy implications from these studies are relatively blunt: get richer, have more telephones, and regulate telecommunications better. In this paper, we examine an alternative policy approach to bridging the digital divide, through organizational innovations that provide low cost Internet access in developing countries, within the existing levels of income, telecommunications infrastructure and regulatory environment. We use survey data from 500 individuals in four states of India: Haryana, Madhya Pradesh, Punjab and Rajasthan, to examine factors influencing patterns of computer and Internet use. The situations in which data was collected were ones where computer and Internet access was being provided by a developmental agency (government or non-government). We estimate logit and multinomial logit models, using explanatory variables such as income, household size, education, and occupation, as well as infrastructure factors such as quality of electricity supply, and availability of telephones and televisions. Thus we are able to go beyond simple analyses of penetration at the country level, to understand the microeconomics of computer and Internet use in rural India. In particular, by examining patterns of use, we are able to comment on the importance of network externalities for diffusion of computers and the Internet in these local rural contexts.

Suggested Citation

  • Jake Kendall & Nirvikar Singh & Kristin Williams & Yan Zhou & P.D. Kaushik, 2007. "Network Economics and the Digital Divide in Rural India," Working Papers 07-29, NET Institute, revised Sep 2007.
  • Handle: RePEc:net:wpaper:0729

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    References listed on IDEAS

    1. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 339-376.
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    More about this item


    IT; ITC; Internet; India; Development; Digital Divide;

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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