How the government should promote high speed broadband in Britain

Are publicly subsidised improvements in broadband infrastructure socially desirable? The answer depends on a consumer surplus exists – whether users derive a benefit from internet usage above and beyond what they pay to their internet service provider. New research by Gabriel Ahlfeldt and colleagues infers this surplus by observing property prices in areas with high internet speeds, finding that property prices increase on average by about 3 per cent when internet speed doubles. Their results argue for rolling out fibre broadband infrastructure in urban areas and less expensive fixed and mobile technologies in rural areas.