Type of Document Dissertation Author Oburu, Peter Helekiah Author's Email Address peteroburu@hotmail.com URN etd-11272008-175323 Title Consumer Adoption of Bandwidth Intensive Applications and Its Impacts on Broadband Adoption Degree Ph.D. Department Economics (Policy Studies) Advisory Committee
Advisor Name Title Dr Bruce A. Seaman Committee Chair Dr. Mark W. Rider Committee Member Dr. Seymour Douglas Committee Member Dr. Shiferaw Gurmu Committee Member Keywords
- consumer adoption
- bandwidth intensive applications
- broadband
- broadband adoption
Date of Defense 2008-05-05 Availability unrestricted Abstract This dissertation investigates the capacity required by an internet application intandem with the network connection type (dial-up or broadband). An internet user’s
experience in accessing various types of applications with either high bandwidth or low
bandwidth is examined in a consumer choice model of broadband adoption. A consumer
implicitly values the time-saving benefits derived from a higher speed internet connection
used to access a particular internet application, and compares those utility benefits to the
higher price of high speed connection services in making the decision to shift to
broadband or remain with a dial-up connection. We find that using broadband rather than
dial-up to run bandwidth intensive applications presents considerable gains in the implicit
value of time saved. Assuming that internet users are rational utility maximizing agents, a
logit model is used to calculate the likelihood of broadband adoption as a function
primarily of the nature/type of the internet applications (“elastic or inelastic”). While the
empirical results are generally consistent with our hypothesis that consumers are more likely to subscribe to broadband if they regularly run applications that are bandwidth
intensive, the results vary somewhat by model specification, and are potentially sensitive
to controlling for endogeneity. Correcting for endogeneity remains the major challenge
in extending this research.
Research Question:
What is the relationship between consumer valuation of the net benefits of using
bandwidth intensive applications and the adoption of broadband internet?
Hypothesis:
The less a consumer requires bandwidth intensive applications; the lower is the likelihood
of switching from a low level bandwidth internet service like dial-up to a high level
bandwidth internet type like broadband. While this relationship may appear obvious, it
has not been systematically investigated or measured, nor has its importance in affecting
lags in broadband adoption been adequately appreciated.
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