Internet access in recessionary periods: The case of Brazil

Abstract

We analyze the impact of recessionary periods on Internet access of households in Brazil. We use microdata on Brazilian households and econometric techniques, such as pooled OLS and Probit regression models, to show that the Brazilian recession had a substantial negative impact on the Internet access of households. We find that, on average, the demand for Internet access at home decreased 8 p.p. due to the deteriorated economic situation. The data also reveal that regions in which Internet access was more widespread suffered a higher percentage decline. Households with lower levels of income and schooling also experience a stronger negative impact on Internet access rates due to the crisis. Our findings suggest that households perceive Internet access as an essential service, making them substitute Internet access at home to other cheaper ways of accessing it outside home when adverse conditions befall.