Does Broadband Bandwidth Variability Improve Quality of Life?: Lessons from Sweden

Abstract

Economic Impact of broadband has been studied by various policy organizations and scholars. It is widely argued that, broadband technology that interconnects people in different regions with the Internet, can directly and indirectly engender economic activities in the region. Many scholars have based their arguments on various theories of change and innovation. Some have used data at various levels to empirically ascertain the impact. However, the number of experimental research on this area has been small- mostly due to lack of availability of data. Moreover, in cases where data were available, the researchers used some aggregate macro economic indicators to ascertain the impact of use of broadband. However, various researchers argue that the aggregate macro economic indicators such as GDP may not always successfully explain the characteristics of quality of life of individuals in different societies. Along with that policy makers often debate on broadband bandwidth. Higher bandwidth should give better experience. However, an important question is to ascertain whether or not variability of Broadband bandwidth is correlated with quality of life. We endeavor to find an answer to this question via econometric estimations using a unique dataset from Sweden. We have used indicators such as wage, rent, industry mix, education, health care and social and political engagement to proxy for economic well being. These variables are used to ascertain the impacts of reliability of connection and variability of bandwidth (speed) of broadband. (Lehr, Osorio, Gillet and Sirbu, 2005) attempted to ascertain the economic impact of broadband availability on the American society, using wage, rent, employment, industry mix. We further their research by estimating the impact of bandwidth on these indicators of quality of life. Our analysis also distinguishes between wired and wireless communications devices. OECD describes, quality of life should consist of various indicators such as health, education, leisure, social connections, civic engagement and governance, environmental quality and personal security. Although access to high-speed networks may indirectly impact these variables, it is not yet obvious how much direct influence access to broadband might have on most of these indicators. We conduct econometric estimations on the impact of the high speed connectivity on variables that captures some these aspects. The econometric models take wage, employment, rent, industry, education, political engagement as dependent variable. These observations are of time series ( years after introduction of technology) cross sectional nature ( at municipalities levels) . Independent variables are as follows: Broadband- variable indicating the number of people using internet at the ‘broadband level’ defined by a specific country, Technology - a binary variable that indicates mobile or wired connectivity, Speed -indicating the minimum broadband bandwidth (download rate at the last mile). As control variables we introduce area specific fixed effect variables, and various other time specific demographic, socio-political and economic variables. A number of fixed effect regressions were employed to ascertain the impact of a. Having access to broadband, b. broadband at various speed and c. mobile or wired broadband, on the aforementioned economic activity variables. The dataset has around 200 million data points at municipality level on wired or wireless broadband bandwidth variability, penetration, mode of technology and reliability are obtained from various sources that collect such data. Economic activity, demography and various other control variables are taken from Swedish Statistical Agency. Broadband access might impact two types of employments: jobs that use IT for better performance and jobs that innovate new IT uses. Our preliminary findings confirm the impact of Broadband speed and connectivity on both type of employment opportunities. However, number of jobs that might be substituted by high bandwidth IT decreases while other types of high skill jobs may increase. More bandwidth may mean more high-level jobs that may also raise the property value relative to the neighboring municipalities. We observe that higher bandwidth has correlation with increase in the IT- intensive sectors and decrease in the small establishments (non-IT) indicating an introduction of knowledge-based society. We also see an inverted U curve relation with education (best on standardized test score) and rent. We observe that people are more engaged in public forums in places where broadband is reliable and have higher bandwidth. The findings of this extensive research should aid the policy makers contemplating on proliferating high bandwidth broadband around the world.