Professor Shane Greenstein, Elinor and Wendell Hobbs Professor at the Kellogg School of Management, Northwestern University, estimates that broadband adds about $10 billion per year in new GDP and another $5 billion in unmeasured consumer surplus. These are large effects, but smaller than some previous estimates. The reason for the difference is that most studies attribute all gains from the Internet to broadband, rather than just the gains that came from upgrading to broadband from dialup. Professor Greenstein’s research, based on the economics of new goods, will help give policymakers a more accurate estimate of the benefits of broadband subsidies. Professor Greenstein will discuss his findings at our event this Friday on Capitol Hill.
