Wednesday, March 12, 2025

Lower Home Broadband Speeds Correlate with Economic Growth; High Speeds Less So

Though the relationship between home broadband speed tends to be correlated with economic growth (the two tend to be found together), the relationship seems a bit non-linear. 


In other words, though the availability or non-availability of home broadband might be more correlated with economic growth, higher speeds seem less correlated. 


Title

Date

Publisher

Key Conclusions

Impact of broadband speed on economic outputs: An empirical study of OECD countries

2014

ideas.repec.org

The study found a positive contribution of broadband speed to economic outputs like GDP, but the effects were greater in lower-income OECD countries. It does not explicitly confirm linearity but suggests a positive relationship.

Is faster better? Quantifying the relationship between broadband speed and economic growth

2014

ScienceDirect

This study aimed to quantify the effect of higher broadband speeds (10 Mbps vs. 25 Mbps) on economic growth rates in U.S. counties. It found no significant economic payoff from the speed difference, suggesting that the relationship might not be linear or significant at higher speed thresholds.

The economic impact of mobile broadband speed

2014-2019 data

ScienceDirect

Using panel data from 116 countries, this study found that a 10% increase in mobile broadband speed was associated with a 0.2% increase in labor productivity with a one-year lag, but only in non-OECD and low-income countries. This indicates a potentially non-linear relationship, as effects were not robust across all countries.

Broadband Infrastructure and Economic Growth in Rural Areas

Not specified

ScienceDirect

The study suggested that the economic impact of broadband might be more significant at lower speeds (below 10 Mbps), with higher speeds showing small and statistically insignificant effects, implying a non-linear relationship.

Broadband׳s contribution to economic growth in rural areas: Moving towards a causal relationship

Not specified

ScienceDirect

Here, the focus was on adoption rather than speed per se, but it noted that economic benefits might plateau or show diminishing returns beyond a certain speed or adoption level, hinting at a non-linear relationship.

Socioeconomic benefits of high-speed broadband availability and service adoption: A survey

Not specified

ScienceDirect

The findings indicate that socioeconomic benefits might show diminishing returns as speed increases, suggesting the relationship between speed and economic outcomes is not strictly linear.


In fact, the correlation might be inverted as well: higher economic growth creates demand for home broadband. For that matter, there also are correlations between demand for home broadband and income; wealth and educational status. 


Study Title

Published

Publisher

Key Conclusions

"Exploring the Relationship between Broadband and Economic Growth"

2016

World Bank

Analyzed the bidirectional relationship between broadband and economic growth, suggesting that while broadband penetration can boost GDP, economic growth also increases demand for broadband services. documents.

"Broadband for all: charting a path to economic growth"

2014

Deloitte

Found a strong correlation between broadband availability and economic growth, indicating that as economies grow, there is an increased demand for higher broadband speeds and better infrastructure.

"The benefits and costs of broadband expansion"

2020

Brookings Institution

Discussed how economic growth leads to increased broadband adoption, as higher income levels and business expansion drive the need for improved digital connectivity.

"Mobile broadband drives economic development"

2019

Ericsson

Highlighted that economic development spurs demand for mobile broadband services, as growing economies require enhanced communication infrastructure to support business and consumer needs.

"Global Connectivity Index"

2023

Wikipedia

Indicated that nations with higher GDP per capita tend to have greater broadband penetration, suggesting that economic prosperity increases the demand for broadband services.


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