Digital Divide

The results of a study by Avi Goldfarb and Jeff Prince, Cornell University. Published in Information Economics and Policy, March 2008

Does a digital divide exist between upper and lower

classes in the U.S. for internet usage?

Upper and lower classes

• Who has better access to the internet?

Upper and lower classes

• Who has better access to the internet?

• Who uses the internet more?

Upper and lower classes

• Who has better access to the internet?

• Who uses the internet more?

• How is the internet used?

Upper and lower classes

• Who has better access to the internet?

• Who uses the internet more?

• How is the internet used?

• Should internet access be subsidized?

Upper and lower classes

Who has better access to the internet?

Low-income,low or no education

High-income,high education

Who has better access to the internet?

Hint, it’s me.

Low-income,low or no education

High-income,high education

Who uses the internet more?

Low-income,low or no education

High-income,high education

Who uses the internet more?

I DO.

Low-income,low or no education

High-income,high education

Why do lower income, lower educated people use the

internet more?

Four possible reasons

Do low-income people who choose to adopt the internet

are those who place a particularly high value on it?

H1

Do low-income people who choose to adopt the internet

are those who place a particularly high value on it?

If it costs a lot to get access to the internet, and you have no money yet still find a way

to get a computer and internet access, it must be very valuable to you.

H1

Do low-income people have more leisure time?

H2

Do low-income people have more leisure time?

All things being equal, if everyone derives the same value from the internet—the same utility—then

those with more time on their hands will use the internet more often.

H2

Do low-income people find the internet more useful

than others?

H3

Do low-income people find the internet more useful

than others?

H3

If low-income people can get services online that they normally have no access to, then if follows that they

will spend more time online.

Do low-income people have a lower opportunity cost

of leisure time due to lower wages?

H4

Do low-income people have a lower opportunity cost

of leisure time due to lower wages?

H4

If both high- and low-income people derive the same benefit per hour of usage, then it follows that

low-income people will spend more time online because it costs them less.

The results.H1

H2

H3

H4

The results.

• Everyone values the internet the same.H1

H2

H3

H4

The results.

• Everyone values the internet the same.

• Statistics show low- and high-income people have the same amount of leisure time.

H1

H2

H3

H4

The results.

• Everyone values the internet the same.

• Statistics show low- and high-income people have the same amount of leisure time.

• Low-income people use the internet for gaming and chat.

H1

H2

H3

H4

The results.

• Everyone values the internet the same.

• Statistics show low- and high-income people have the same amount of leisure time.

• Low-income people use the internet for gaming and chat.

• That leaves opportunity cost: Time is Money!High-income, higher educated people use the internet for e-commerce and research.

H1

H2

H3

H4

Okay. So what?

Should internet access be subsidized?The negative: The internet is like TV. If it’s free or cheap, less educated, lower income people waste hours of unproductive time using it.

The positive: Low-income people eventually use the internet for email, researching, e-commerce, health information, and e-government. (46%)

Conclusion

The authors support subsidies to help eliminate the American digital divide.

Avi Goldfarb, Jeff Prince. Internet adoption and usage patterns are different: Implications for the digital divide, Information Economics and Policy 20 (2008), 2-15