Confusing relevance and price: Interpreting and improving surveys on internet non-adoption

Abstract

Internet service is considered by many to be essential, yet many households do not have a home Internet connection. Survey evidence suggests a lack of interest is the primary explanation, but some policymakers and advocates prefer to label price as the dominant factor, thereby laying the groundwork for policy interventions, regulation, and subsidies. Most surveys on the reasons for non-adoption are, however, inherently ambiguous and do not permit useful inferences because the typical questions asked cannot distinguish between “relevance” or “price” as the cause of non-adoption. Exploiting data from latest Census Bureau survey, I show that responses appearing to speak to relevance or price always speak to relevance and price. I then propose a simple modification to the Census Bureau survey that permits the construction of the non-users demand curve for Internet service including its curvature, thereby offering important information to policymakers in addressing the role of price in increasing Internet adoption.