Is Faster Better? Quantifying the Relationship between Broadband Speed and Economic Growth

Phoenix Center Policy Bulletin No. 44, February 2018

23 Pages Posted: 14 Mar 2018

See all articles by George S. Ford

George S. Ford

Phoenix Center for Advanced Legal & Economic Public Policy Studies

Multiple version iconThere are 4 versions of this paper

Date Written: February 2018

Abstract

In this paper, I aim to quantify the relationship between higher broadband speeds (10 Mbps versus 25 Mbps) and the growth rates in important economic outcomes in U.S. counties including jobs, personal income, and labor earnings. Doing so exposes the potential for severe selection bias in studies of broadband’s economic impact, which is addressed in this study using Coarsened Exact Matching. Once balanced, the data reveal no economic payoff from the 15 Mbps speed difference between the years 2013 and 2015. I also revisit the Crandall, Lehr and Litan (2007) study on broadband’s effect on employment to evaluate the possible impacts of selection bias, and conclude that the positive benefits of broadband reported in that particular study are likely spurious. The selection bias problem may infect other studies on the economic impacts of broadband Internet services.

Keywords: Broadband, Economic Development, Causal Modeling, Coarsened Exact Matching, Internet

JEL Classification: L96, L98

Suggested Citation

Ford, George S., Is Faster Better? Quantifying the Relationship between Broadband Speed and Economic Growth (February 2018). Phoenix Center Policy Bulletin No. 44, February 2018. Available at SSRN: https://ssrn.com/abstract=3138739

George S. Ford (Contact Author)

Phoenix Center for Advanced Legal & Economic Public Policy Studies ( email )

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United States

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