You’re Not Paying Enough for the Internet

By Paul Kedrosky · March 5, 2006 · ·

From a new Stanford economics working paper:

Only about 0.2% of consumer spending in the U.S. … went for Internet
access in 2004 yet time use data indicates that people spend around 10% of their
entire leisure time going online… Based on expenditure and time use data and our elasticity estimate,
we calculate that consumer surplus from the Internet may be around 2% of
full-income, or several thousand dollars per user.

Related posts:

  1. VCs Continue to Lust After Consumer Internet
  2. On the Internet, Nobody Knows …
  3. Andrew Odlyzko on Internet Economics, Internet Evolution, and Misleading Networking Myths
  4. A Night in Life of an Internet Cafe
  5. Internet Outbreaks: Epidemiology and Defenses

Comments

  1. Zoli Erdos says:
    March 5, 2006 at 4:06 pm

    Oh, please, don’t give Comcast ideas, it’s already $50! :-(

  2. Batu says:
    March 5, 2006 at 9:11 pm

    I would be curious to see the bigger picture, not just access cost. The cost of that 10% leasure time is not only access cost but other stuff.
    Batu

  3. vinnie mirchandani says:
    March 5, 2006 at 10:58 pm

    I think this was the final justification ATT needed to go for SBC!
    Is the author smoking? Our broadband speed for the cost make about 15 other countries in world ahead of the US. Nesides there is no free lunch – our boradband comes bundled with some other telecom service, some one is paying for Google ads, Feds charge more indirect tax on the service – 20% – than other services…

  4. Martin Wells says:
    March 18, 2006 at 10:00 pm

    Maybe that’s because the internet is an order of magnitude more efficient. :)