A Need for Speed? Rural Internet Connectivity and the No access / Dial-up / High-speed Decision

As residential high-speed Internet access has become more prevalent, the composition of the "digital divide" between rural and urban households has shifted. In 2000, dial-up access rates in rural household lagged behind their urban counterparts by eleven percent. By 2003, however, dial-up access rates were equal between rural and urban households, due in part to soaring high-speed rates in urban areas. This paper explores the household decision between no Internet access, dial-up access, and high-speed access. In particular, nested logit and multinomial logit specifications are compared. The paper also uses a decomposition technique to estimate the contributions of various factors (including education, income, and infrastructure levels) to each of the "access-specific" divides between rural and urban households. The results suggest that the nested logit is the preferred specification, and that differences in education and income account for the majority of each type of divide.