Price and Income Elasticity of Broadband Demand in OECD Countries
SPC Network reports on the importance of price and income as drivers of demand for broadband in a brief paper reporting the results of a cross sectional model.
Broadband subscription levels and prices together with national income vary substantially across the 30 member states of the OECD. In this paper we seek to establish the significance of both price and income as drivers of broadband demand. Based on a cross sectional model of OECD countries, we find that price elasticity is towards the top end of the range generally found for telecommunications services in developed countries and that the income elasticity suggests that broadband is already not regarded as a luxury, but a necessity.
