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|Abstract:||This paper uses both a discrete choice demand model and a direct survey method to derive robust measures of the contribution of home broadband to consumer welfare during the early years of broadband adoption by U.S. households. We estimate a demand system that distinguishes between cable, DSL, satellite and fiber broadband versus dial-up Internet services. We allow household preferences for Internet services to vary depending on the share of rural households in each geographic market, and find a significant impact of rural geography on demand. The estimated own-price elasticity of demand for broadband declines over time from -1.5 in 2005 to -0.7 in 2008. Consumer surplus from Internet is found to concentrate in broadband services, with the net consumer benefits from home broadband in 2008 on the order of $32 billion per year.|
|Citation:||Dutz, Mark A, Orszag, Jonathan M, Willig, Robert D. (2012). The Liftoff of Consumer Benefits from the Broadband Revolution. Review of Network Economics, 11 (4), 10.1515/1446-9022.1355|
|Pages:||1 - 34|
|Type of Material:||Journal Article|
|Journal/Proceeding Title:||Review of Network Economics|
|Version:||Final published version. Article is made available in OAR by the publisher's permission or policy.|
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