What is the Impact of Broadband Bandwidth Variability on Quality of Life?: Lessons from Sweden

47 Pages Posted: 3 Apr 2017

See all articles by Moinul Zaber

Moinul Zaber

University of Dhaka; LIRNEasia

Erik Bohlin

Chalmers University of Technology

Sven Lindmark

Chalmers University of Technology

Date Written: March 30, 2017

Abstract

Connectivity opens economic possibilities. Broadband opens the possibility to connect millions via Internet. Economic Impact of broadband has been studied by various policy organizations and scholars. It is widely argued that, broadband technology can directly and indirectly engender economic activities in the region. Many of these arguments are based on various theories of change and innovation. Some scholars have used data at various levels to empirically ascertain the impact. However, the number of data driven research on this area has been small. Many researchers have used some aggregate macroeconomic indicators to ascertain the impact of use of broadband. However, these indicators such as GDP may not always successfully explain various aspects of quality of life of individuals in different societies. Along with that policy makers often debate on the variability of broadband bandwidth. Higher bandwidth should give better experience. Therefore, an important question is to ascertain whether or not variability of Broadband bandwidth is correlated with different aspects of quality of life (QoL). We endeavor to find an answer to this question via econometric estimations using a unique dataset from Sweden. Our hypothesis is based on the notion that, higher speed and reliable communication via broadband both in mobile and fixed form would engender new economic activities which in turn may shape various aspects of life.

OECD describes, quality of life should consist of various indicators such as health, education, leisure, social connections, civic engagement and governance, environmental quality and personal security. Although access to high-speed networks may indirectly impact these variables, it is not yet obvious how much direct influence access to broadband might have on most of these indicators. (Lehr, Osorio, Gillet and Sirbu, 2005) attempted to ascertain the economic impact of broadband availability on the American society, using wage, rent, employment, industry mix. We posit that in this era of Internet of Things, connectivity without reliable and low bandwidth broadband may fail to impact on the society. We have used indicators such as education, economic growth, wage, rent, sector wise employment and industry mix, peoples’ commuting pattern, public participation as a collective measure of economic well-being. Our analysis also distinguishes between wired and wireless communications devices.

The observations in our econometric models are of time series (years after introduction of technology) cross sectional nature (at municipalities levels). Independent variables are as follows: Broadband- variable indicating the number of people using internet at the ‘broadband level’ defined by a specific country, Technology - a binary variable that indicates mobile or wired connectivity, Speed -indicating the minimum broadband bandwidth (download rate at the last mile). As control variables, we introduce area specific fixed effect variables, and various other time specific demographic, socio-political and economic variables. A number of fixed effect regressions were employed to ascertain the impact of a. Having access to broadband at various speed and b. mobile vs. wired broadband, on the aforementioned economic activity variables.

The dataset has around 1700 data points at municipality levels from years 2009 to 2015. The data are obtained from various sources that collect such data. Economic activity, demography and various other control variables are taken from Swedish Statistical Agency. Our initial findings indicate that broadband bandwidth variability has mixed impact on various aspects of quality of life.

Mobile broadband speed has positive impact on English and Mathematics and negative impact on native language (in this case Swedish). However, the results show that reliable broadband coverage has positive impact on Mathematics and Swedish. This is may indicate that there may be a scarcity of educational materials in Swedish in comparison with English and Mathematics. Also, it might indicate that the materials at high speed are focused on entertainment rather than on education.

We find that fixed broadband coverage has positive impact on total number of firms. However, mobile download speed does not have significant impact on number of start-ups or total number of firms. This is quite intuitive as firms rely on fixed connectivity.

The estimations show that mobile broadband speed on average does not have significantly positive impact on job creation- both in service and manufacturing industry. Estimations indicate, mobile data speed may have negative impact on service sector if time specific idiosyncrasies are controlled. We also see that coverage of 10 Mbps has negative impact on job creation at the service sector. Our estimations categorize jobs into service and manufacturing sub-groups. However, most jobs in both the sub-groups require both skilled and unskilled labor. The decreasing trend may indicate that that broadband speed and coverage may have negative effect on jobs in the unskilled parts of these sectors. The negative impact of coverage is more prominent in the small cities than in the metropolitan and large cities. Overall, it might mean broadband speed is requiring more of high skill labor in all the job sectors and replacing low skill jobs.

Municipalities that have higher mobile download speed has higher housing price. This might indirectly indicate that better mobile speed is a proxy for infrastructural acumen. Dwelling expenses rise in places where infrastructure is better. However, we do not see any significant impact of coverage or reliability variables.

Mobile broadband speed does not have any significant impact on salary. This is intuitive as people probably do not rely on mobile data for work related issues. We see that municipalities with better coverage of 10 Mbps have seen less average salary. This may be an aggregate picture as municipalities are of various categories and have different types of job requirements. However, at the large cities broadband at 100 Mbps has positive impact on salary. As large cities are mostly the innovation hubs and job incubators, the results indicate that better and reliable coverage of high speed fixed broadband may increase high salaried jobs and in turn indicate scarcity of high skill labor. This indicates options for creation of more jobs for skilled labors.

Mobile broadband speed has enabled people to work from distance and we see a positive impact of download speed on the increase in number of workplaces and people’s commute. This may indicate that the firms can now build workplaces at remote areas and still communicate. This may also mean that as mobile technology is improving, people are increasingly using data on the go for communication via video and audio. This in turn is encouraging them to travel further till they are able to communicate via their phones. We also see that better broadband coverage is increasing number of workplaces indicating that firms can now create facilities in places far apart and still can communicate and manage using broadband infrastructure. However, the most significant find is on the people’s commuting patter which we see in decrease with increase in reliable fixed connectivity. This indicates that broadband is maybe associated with decrease in physical travel for work related issues which can be a positive sign for environment.

Our findings show that both mobile broadband speed and reliable connectivity have positive impact on public participation. People votes more in municipalities where mobile broadband speed is higher and fixed communication converge is better. This may indicate the positive impact of high connectivity and availability of information.

The findings of this extensive research should aid the policy makers contemplating on proliferating high bandwidth broadband around the world.

Keywords: Broadband Bandwidth, Quality of Life, Broadband Speed, Impact of Broadband, Connectivity

Suggested Citation

Zaber, Moinul and Bohlin, Erik and Lindmark, Sven, What is the Impact of Broadband Bandwidth Variability on Quality of Life?: Lessons from Sweden (March 30, 2017). Available at SSRN: https://ssrn.com/abstract=2943723

Moinul Zaber (Contact Author)

University of Dhaka ( email )

University of Dhaka
Ramna, Dhaka, 1000
Bangladesh

LIRNEasia ( email )

12 Balcombe Place
Colombo, 08
Sri Lanka

Erik Bohlin

Chalmers University of Technology ( email )

SE-412 96 Goteborg
Sweden

Sven Lindmark

Chalmers University of Technology ( email )

SE-412 96 Goteborg
Sweden

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