Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments February 27, 2023 erstellt
Beschreibung:
Promoting internet access equity has become a high priority in many developed and developing countries, where the digitalization of the economy and expansion of telehealth have tied internet access to social and health equity. While substantial funds are spent on subsidizing broadband, little is known about the impact and cost-effectiveness of such subsidies. To address this, we need to measure consumer preferences for internet and its various features such as speed, price, and quality. In this study, we estimate the willingness to pay (WTP) for internet services using a unique survey that we have designed and deployed. We implement a choice-based conjoint analysis on a sample of 5,200 respondents across four states in the United States (US) in 2022. We estimate that an average internet user is willing to spend an extra $1.12 per month to add 1 megabit per second (Mbps) to their speed, and an extra $45.20 per month to improve their internet connection quality. Alongside the conventional WTP point estimation, we use a regression-based curve-fitting approach to estimate WTP at various levels of internet speed and quality. It reveals a strong non-linear behavior: users at the lowest end of speed (quality) demonstrate the highest gains from a given boost in speed (quality) while users with the highest speed (quality) report a negligible improvement. Assisting a user to improve their speed from 1Mbps to 25Mbps creates 2.32 times more value than assisting a user to improve their speed from 25Mbps to 100Mbps. Due this non-linearity, policymakers can create the highest value and impact by focusing their resources on users with poorest internet access before assisting other users. In this sense, offering internet subsidies to the right population (distributive efficiency) could be as important as – if not more important than – raising funds to subsidize internet