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.
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Shane Greenstein is the Martin Marshall Professor of Business Administration at Harvard Business School, where he teaches in the Technology and Operations Management Unit. He researches the economics of innovation, digitization, and the internet. His work examines how competitive markets, standards, and platforms shape the development and diffusion of information technology. He is the author of How the Internet Became Commercial: Innovation, Privatization, and the Birth of a New Network (Princeton University Press, 2015). Before joining HBS, he taught at Northwestern University’s Kellogg School of Management and at the University of Illinois at Urbana-Champaign. He holds a BA from the University of California, Berkeley, and a PhD from Stanford University, both in economics.
