The Demographic and Economic Drivers of Broadband Adoption in the United States
Phoenix Center Policy Paper No. 31
23 Pages Posted: 14 Feb 2008
Date Written: November 1, 2007
In this Policy Paper, we analyze the variation in broadband adoption rates among the respective United States. Significantly, we find that 91% of the variation is explained by demographic and economic conditions, such as household income, education and, most significantly, income inequality. Our research therefore indicates that policies that focus on these demand-side factors perhaps offer more "bang for the buck" in terms of increasing broadband penetration than supply-side policies, including subsidies for networks or regulation of providers. For example, programs that focus upon educational institutions in low-income communities with school age children - like ConnectKentucky's "No Child Left Offline" initiative - may boost broadband adoption rates considerably, as they leverage demand-side drivers that encourage broadband subscription (having a child in school) in a way that may overcome or mitigate the problem of income inequality. Programs that target broadband education for older and retired persons may also be helpful.
Keywords: broadband deployment, demand-side drivers, income, income inequality, Gini Coefficient
JEL Classification: K23, L51, L52, L96, O30, O31, O32, O33, O38
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