Click vs. Tap: Substitution Effects of Smartphones on Computers

Abstract

With the prevalence of smartphones, it is important to understand the relationship between the smartphone channel and the computer channel. In this paper, we examine the extent to which smartphones substitute for or complement computers. We utilize unique panel data on individuals’ smartphone and computer usage, which contain detailed information on all domains and apps individuals visit on their smartphones and computers. In order to estimate the effect of that smartphone usage has on computer usage, we exploit the panel nature of the data and additionally employ instrumental variables. We instrument for smartphone usage time using the Android operating system version. We find that an increase in smartphone usage time decreases computer usage time, indicating that smartphones and computers are substitutes. When we additionally examine the heterogeneity in substitution effects across domain and app categories, we find larger substitution effects for categories where computers may have been a dominant traditional digital channel prior to smartphones. Our domain-app level analysis consistently shows that smartphone usage for a particular app decreases computer usage at the corresponding domain. We find that the substitution effect is greater for individuals with lower income and for younger individuals.