Abstract

http://ssrn.com/abstract=881228
 
 

References (52)



 
 

Citations (15)



 


 



The Value of Broadband and the Deadweight Loss of Taxing New Technology


Austan Goolsbee


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

February 2006

NBER Working Paper No. w11994

Abstract:     
With fixed costs of developing technology, taxes can generate large efficiency costs by slowing the rate of diffusion and these costs are not accounted for in conventional analyses. This paper illustrates this by analyzing the impact that taxes would have had on broadband Internet access at an early stage of its diffusion around the country, combining data on individual demand by area with data on supplier entry in those markets. Applying a tax to broadband in 1998 would have reduced the quantity and generate a large deadweight loss in the conventional model but when the analysis accounts for the fixed costs of entering new markets, taxes would have also delayed entry in several markets. In these places, the lost consumer surplus from delay is an additional deadweight loss and it more than doubles the estimated efficiency costs of taxation. The conventional model also dramatically understates the share of tax burden that would have been borne by customers.

Number of Pages in PDF File: 25

working papers series





Download This Paper

Date posted: April 22, 2006  

Suggested Citation

Goolsbee, Austan, The Value of Broadband and the Deadweight Loss of Taxing New Technology (February 2006). NBER Working Paper No. w11994. Available at SSRN: http://ssrn.com/abstract=881228

Contact Information

Austan Goolsbee (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-5869 (Phone)
773-702-0458 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN


Paper statistics
Abstract Views: 684
Downloads: 34
References:  52
Citations:  15

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.453 seconds