Ability, location and household demand for Internet bandwidth

Scott James Savage and Donald M. Waldman ()

International Journal of Industrial Organization, 2009, vol. 27, issue 2, pages 166-174

Abstract: This paper examines consumer preferences for Internet bandwidth, focusing on technical ability and urban/rural location as sources of preference heterogeneity. An economic model is outlined that shows that ability decreases the effective price of bandwidth. As a result of this decrease, part of the total effect of an increase in ability will always be an increase in the demand for bandwidth. The implication is empirically investigated with an econometric approach that overcomes the limitations of the aggregated data that is currently available to describe consumer preferences. Results show that high-ability, urban consumers are willing to pay a substantive monthly premium for an improvement in bandwidth relative to rural consumers.

Keywords: Ability; Digital; divide; Internet; bandwidth; Location (search for similar items in EconPapers)
Date: 2009

Downloads: (external link)
http://www.sciencedirect.com/science/article/B6V8P ... 4c479977e7d79c3271eb
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eee:indorg:v:27:y:2009:i:2:p:166-174

Access Statistics for this article

International Journal of Industrial Organization is edited by P. Bajari, B. Caillaud and N. Gandal

More articles in International Journal of Industrial Organization from Elsevier
Series data maintained by Heidi Boesdal ().