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High-speed Internet access and housing values

Author

Listed:
  • Gabor Molnar
  • Scott J. Savage
  • Douglas C. Sicker

Abstract

A hedonic model is estimated that relates house values to high-speed Internet access while controlling for the potential endogeneity of Internet access. Results show that single-family homes with access to a 25 Mbps broadband connection have a price that is about $5,977, or 3%, more than similar homes in neighborhoods with 1 Mbps. The rural premium is lower at $5,099. A cost-benefit exercise on the viability of rural broadband shows that demand will generally not support private investment, but that the revenue gap from upgrading legacy networks could be readily covered by the Universal Service Fund and other public subsidies.

Suggested Citation

  • Gabor Molnar & Scott J. Savage & Douglas C. Sicker, 2019. "High-speed Internet access and housing values," Applied Economics, Taylor & Francis Journals, vol. 51(55), pages 5923-5936, November.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:55:p:5923-5936
    DOI: 10.1080/00036846.2019.1631443
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    Cited by:

    1. Briglauer, Wolfgang & Krämer, Jan & Palan, Nicole, 2024. "Socioeconomic benefits of high-speed broadband availability and service adoption: A survey," Telecommunications Policy, Elsevier, vol. 48(7).
    2. Anil Rupasingha & John Pender & Ryan Williams, 2024. "Broadband and rural development: Impacts of the U.S. Department of Agriculture Broadband Initiatives Program on saving and creating jobs," Economic Inquiry, Western Economic Association International, vol. 62(2), pages 698-721, April.
    3. Guiffard, Jean-Baptiste, 2024. "Valuing the virtual: The impact of fiber to the home on property prices in France," Telecommunications Policy, Elsevier, vol. 48(4).
    4. Han, Luyi & Wojan, Timothy R. & Goetz, Stephan J., 2024. "Cloud computing and rural globalization: Evidence for the U.S. nonfarm economy," Telecommunications Policy, Elsevier, vol. 48(8).
    5. Klein, Gordon J., 2022. "Fiber-broadband-internet and its regional impact—An empirical investigation," Telecommunications Policy, Elsevier, vol. 46(5).
    6. Han, Luyi & Wojan, Timothy R. & Goetz, Stephan J., 2023. "Experimenting in the cloud: The digital divide's impact on innovation," Telecommunications Policy, Elsevier, vol. 47(7).
    7. Worden, David & Hambly, Helen, 2022. "Willingness to pay and pricing for broadband across the rural/urban divide in Canada," Telecommunications Policy, Elsevier, vol. 46(2).

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