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Household Demand for Broadband Internet in 2010

Author

Listed:
  • Rosston Gregory L.

    (Stanford University)

  • Savage Scott J

    (University of Colorado at Boulder)

  • Waldman Donald M

    (University of Colorado at Boulder)

Abstract
This paper uses data from a nationwide survey administered during late 2009 and early 2010 to estimate a random utility model of household preferences for broadband Internet service. Reliability and speed are important service characteristics: the representative household is willing to pay $20 per month for more reliable service; $45 for an improvement in speed from slow to fast; and $48 for an improvement in speed from slow to very fast. A representative household would be willing to pay $79 per month for a fast, reliable Internet service. Internet valuations increase with experience, and there has been an estimated two- to three-fold increase in consumer surplus per household between 2003 and 2010. If experience causes increased valuation, targeted programs that educate households about the benefits from broadband, expose households to the broadband experience and/or directly support the initial take-up of broadband have potential to increase overall penetration in the United States.

Suggested Citation

  • Rosston Gregory L. & Savage Scott J & Waldman Donald M, 2010. "Household Demand for Broadband Internet in 2010," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-45, September.
    • Handle: RePEc:bpj:bejeap:v:10:y:2010:i:1:n:79
    DOI: 10.2202/1935-1682.2541
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    References listed on IDEAS

    as
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