Patterns of Broadband Efficiency in the U.S.

Abstract

Data envelopment analysis is used to assess the efficiency of broadband Internet adoption and use in the U.S. Analyses at the state level from 2005 through 2007 suggest that broadband adoption and use is not equally efficient across the U.S. states. Although the instantaneous efficiencies are relatively high for many states, the changes in total factor productivity suggest that the efficiency of broadband adoption and use still increases over time. Moreover, it is observed that efficiency values are often spatially autocorrelated, which suggests spatial dependency from spillovers or interstate competition. This leads to a particular spatial diffusion pattern in broadband adoption. Although states have different strategies in support of broadband expansion they need to identify their shortcomings and use the appropriate mix of inputs (and outputs) to improve their efficiencies.