The Frontier of Broadband Adoption Across the OECD: A Comparison of Performance

Abstract

We assess the performance and efficiency of OECD countries with respect to broadband Internet subscription. Using the econometric techniques of Least Squares and Stochastic Frontier Analysis, we estimate scores indicating the efficiency with which a country converts its economic and demographic endowments into broadband subscriptions. With very few exceptions, we find that broadband subscription in OECD countries is consistent with those endowments – about two thirds of OECD countries have an efficiency rate of 90% or better. We find that economic and demographic endowments explain nearly all of the variation in broadband subscriptions (85%). This finding suggests that public policy's role for broadband adoption should be targeted at improving or mitigating the adverse effects of underlying demographic and economic conditions, such as computer ownership and education programs.

Keywords:

• Internet
• OECD
• stochastic frontier analysis
• broadband
• telecommunications
• economic development

Acknowledgements

The authors thank Randy Beard, John Jackson, two anonymous referees and the editor for very helpful comments and suggestions. Remaining errors are the authors’ responsibility alone.

Notes

¹The OECD broadband data is available at http://www.oecd.org/sti/ict/broadband. The OECD updates this data every six months.