Social Interactions and the Digital Divide: Identification and Policy Implications

Abstract In the light of recent policies aiming at raising the computer literacy of young generations and at reducing the digital divide, this paper analyzes to what extent the probability of an individual having computer abilities is affected by the computer skills of her household's other members, i.e. if there are significant within household peer effects. We show how peer effects can be identified when skills are measured with a continuous variable and the learning costs are increasing and convex. Our application on a sample of Italian households indicates that peer abilities within a family significantly increase the individual probability of being skilled.