A Framework for Evaluating Regional Impacts of Broadband Internet Access: Application to Telecommuting Behavior

Abstract

This paper proposes a quantitative framework to evaluate the impacts of broadband internet access on behavioral choices people make, and the consequences of these choices on the society as a whole. The framework includes regional household level choice models to predict behavioral shifts enabled by broadband access, and economic models to measure the public benefits generated by the shift. As an illustration, the paper highlights the relationship between broadband access and the level of telecommuting in a region. The parameters of the model are calibrated using available data from public and proprietary sources. The paper further estimates the impacts of enabling telecommuting behavior nationally on the improvement in productivity and energy efficiency, as well as on reducing environmental impacts. A key issue addressed in the paper is the lack of data that would enable analysts to extend this telecommuting model to other household level activities. The paper concludes with recommendations on large-scale data collection efforts to strengthen our ability to clearly understand and conduct benefit-cost analysis of the investment in broadband as we build a green economy.

Keywords: Broadband, Telecommuting, Green Economy, Benefit-Cost Analysis

JEL Classification: C67, D12, Q43