Broadband expansion increases household income in China, Brazil and India

Once a family’s download speed reaches 4Mbps, average earnings rise by $322 a month (£201) in the 34 richer nations, including the UK, that are part of the OECD (Organisation for Economic Co-operation and Development). The increase is £75 a month for households which double their speed from 4Mbps to 8Mbps, enabling high-definition video and enough bandwidth for more than one person to use any website simultaneously. Once households jump from fast to superfast – more than 24Mbps – their income rises again. For households which go from no internet access to 4Mbps, earnings can rise by £1,320 a year. “The evidence is building for broadband speed as a driver of economic growth”. *

Excerpted from a study cited in the Ericsson blog:

“Ericsson, in conjunction with Arthur D. Little and Chalmers University of Technology, releases results of a joint study on the economic effects of broadband access speed on households.

This household-level (microeconomic) study reveals thresholds for the minimum speed upgrade needed to provide a statistically significant impact on household income. These thresholds are different for OECD (Organization for Economic Cooperation and Development)and BIC (Brazil, India and China) countries.

Absolute levels of return*, were found to be higher for OECD economies, which supports the idea that gains from broadband increase if more advanced services are available via the broadband access.

Key findings, after controlling for factors known to influence income (i.e. age, sex/gender, education, household size, skills and type of occupation):

The average increase in household income for a broadband speed upgrade from 4 to 8 Mbps is USD 120 per month in OECD countries
BIC households benefit most by upgrading from 0.5 to 4 Mbps, at USD 46 per month.”overdose of orlistat

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