The Impact of High-Speed Broadband Availability on Real Estate Values: Evidence from United States Property Markets

Abstract

This working paper presents a proof-of-concept study to show the possible impact of fiber-based broadband service availability on real estate values. The research goal is to find out whether people are willing to pay more for real estate located in areas where fiber is available than for a property that does not offer this amenity. Using information from the National Broadband Map and county assessors’ data for residential single-family houses from three Metropolitan Statistical Areas in the State of New York, we apply a hedonic pricing model to test the hypothesis. Early results suggest that fiber availability may indeed have a positive impact on real constant-quality house prices. Initial findings also urge additional research efforts to test the impact more thoroughly and to address issues due to potential endogeneity.

Keywords: broadband, Internet, real estate, valuation

JEL Classification: R21, L96, L98