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Efficiency of broadband internet adoption in European Union member states

Author

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  • Pavlyuk, Dmitry

Abstract

This paper is devoted to econometric analysis of broadband adoption efficiency in EU member states. Stochastic frontier models are widely used for efficiency estimation. We enhanced the stochastic frontier model by adding a spatial component into the model specification to reflect possible dependencies between neighbour countries. A maximum likelihood estimator for the model was developed. The proposed spatial autoregressive stochastic frontier model is used for estimation of broadband adoption efficiency. We confirmed a negative impact of average prices of broadband services on broadband adoption in a country and also discovered a significant negative influence of a level of population income inequality. Significant positive spatial effects also have been revealed, so higher broadband penetration rates in neighbour countries have a positive impact on broadband adoption in a given country.

Suggested Citation

  • Pavlyuk, Dmitry, 2011. "Efficiency of broadband internet adoption in European Union member states," MPRA Paper 34183, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:34183
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    File URL: https://mpra.ub.uni-muenchen.de/34183/2/MPRA_paper_34183.pdf
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    References listed on IDEAS

    as
    1. Alexandra Schmidt & Ajax Moreira & Steven Helfand & Thais Fonseca, 2009. "Spatial stochastic frontier models: accounting for unobserved local determinants of inefficiency," Journal of Productivity Analysis, Springer, vol. 31(2), pages 101-112, April.
    2. Erniel B. Barrios & Rouselle F. Lavado, 2010. "Spatial Stochastic Frontier Models," Microeconomics Working Papers 23091, East Asian Bureau of Economic Research.
    3. Kumbhakar,Subal C. & Lovell,C. A. Knox, 2003. "Stochastic Frontier Analysis," Cambridge Books, Cambridge University Press, number 9780521666633, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    spatial stochastic frontier; broadband adoption; efficiency;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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