nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2009‒02‒28
six papers chosen by
Walter Frisch
University Vienna

  1. The Internet and Local Wages: Convergence or Divergence? By Chris Forman; Avi Goldfarb; Shane Greenstein
  2. Consumer Search on the Internet By Babur de los Santos
  3. The Broadband Bonus: Accounting for Broadband Internet's Impact on U.S. GDP By Shane Greenstein; Ryan C. McDevitt
  4. VOSviewer: A Computer Program for Bibliometric Mapping By Eck, N.J.P. van; Waltman, L.R.
  5. The dynamics of entrepreneurship in ICT: case of mobile phones downstream services in Kenya By Raphael Ngatia Kanothi
  6. Motivation and Sorting in Open Source Software Innovation By Belenzon, Sharon; Schankerman, Mark

  1. By: Chris Forman; Avi Goldfarb; Shane Greenstein
    Abstract: Did the diffusion of the Internet lead to convergence or divergence of local wages? We examine the relationship between business use of advanced Internet technology and regional variation in US wage growth between 1995 and 2000.We show that business use of advanced Internet technology is associated with wage growth but find no evidence that the Internet contributed to regional wage convergence. Advanced Internet technology is only associated with wage growth in places that were already well off in terms of income, education, population, and industry. Overall, advanced Internet explains one-quarter of the difference in wage growth between these counties and all others.
    JEL: O33 R11
    Date: 2009–02
  2. By: Babur de los Santos (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)
    Abstract: This paper uses consumer search data to explain search frictions in online markets, within the context of an equilibrium search model. I use a novel dataset of consumer online browsing and purchasing behavior, which tracks all consumer search prior to each transaction. Using observed search intensities from the online book industry, I estimate search cost distributions that allow for asymmetric consumer sampling. Research on consumer search often assumes a symmetric sampling rule for analytical convenience despite its lack of realism. Search behavior in the online book industry is quite limited: in only 25 percen of the transactions did consumers visit more than one bookstore's website. The industry is characterized by a strong consumer preference for certain retailers. Accounting for unequal consumer sampling halves the search cost estimates from 1.8 to 0.9 dollars per search in the online book industry. Analysis of time spent online suggests substitution between the time consumers spend searching and the relative opportunity cost of their time. Retired people, those with lower education levels, and minorities (with the exception of Hispanics) spent significantly more time searching for a book online. There is a negative relationship between income levels and time spent searching.
    Keywords: consumer search, internet, search costs
    JEL: C14 D43 D83 L13
    Date: 2008–09
  3. By: Shane Greenstein; Ryan C. McDevitt
    Abstract: How much economic value did the diffusion of broadband create? We provide benchmark estimates for 1999 to 2006. We observe $39 billion of total revenue in Internet access in 2006, with broadband accounting for $28 billion of this total. Depending on the estimate, households generated $20 to $22 billion of the broadband revenue. Approximately $8.3 to $10.6 billion was additional revenue created between 1999 and 2006. That replacement is associated with $4.8 to $6.7 billion in consumer surplus, which is not measured via Gross Domestic Product (GDP). An Internet-access Consumer Price Index (CPI) would have to decline by 1.6% to 2.2% per year for it to reflect the creation of value. These estimates both differ substantially from those typically quoted in Washington policy discussions, and they shed light on several broadband policy issues, such as why relying on private investment worked to diffuse broadband in many US urban locations at the start of the millennium.
    JEL: L86 O33 O47
    Date: 2009–02
  4. By: Eck, N.J.P. van; Waltman, L.R. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: We present VOSviewer, a computer program that we have developed for constructing and viewing bibliometric maps. VOSviewer combines the VOS mapping technique and an advanced viewer into a single easy-to-use computer program that is freely available to the bibliometric research community. Our aim in this paper is to provide an overview of the functionality of VOSviewer and to elaborate on the technical implementation of specific parts of the program.
    Keywords: bibliometric mapping;visualization;density view;VOSviewer;VOS
    Date: 2009–02–11
  5. By: Raphael Ngatia Kanothi
    Abstract: The research paper explores the extent to which mobile phones downstream services, defined here as those provided using the existing connectivity, are generating opportunities for entrepreneurship development in Kenya. After identifying the services of mobile payphones, money transfer and phone repair, the paper analyses the micro-enterprises providing them and their contribution to income and employment creation. It shows that majority of the enterprises providing the services are survivalists and they are characterised by minimal barriers to entry and therefore stiff competition. Those in growth-oriented category are characterised by barriers to entry and specialisation. These enterprises have made a notable contribution to the concerned households and the economy in form of employment opportunities, income generation and linkage with other sectors. They directly supported over 25,000 households in addition to the extra staff employed in them. Across the board the incomes of the operators improved after engaging in the enterprises. The enterprises also created opportunities for women, youth, people with disabilities and those with low or no education. To the economy, payphones have contributed to increasing the mobile phones coverage to 75% of the country; money transfer services have provided cheaper financial transactions and means of sending emergency funds; while repair services have enabled low income earners to remain connected even when they could not afford to buy new phones. The paper therefore concludes that mobile phones downstream services have generated entrepreneurial opportunities to many as well as contributing positively to the goal of fighting poverty.
    Keywords: mobile phones downstream services, enterprises, employment, income and the poor.
    Date: 2009
  6. By: Belenzon, Sharon; Schankerman, Mark
    Abstract: This paper studies the role of intrinsic motivation, reputation and reciprocity in driving open source software innovation. We exploit the observed pattern of contributions - the 'revealed preference' of developers - to infer the underlying incentives. Using detailed information on code contributions and project membership, we classify developers into distinct groups and study how contributions from each developer type vary by license (contract) type and other project characteristics. The central empirical finding is that developers strongly sort by license type, project size and corporate sponsorship. This evidence confirms the importance of heterogeneous motivations, specifically a key role for motivated agents and reputation, but less for reciprocity.
    Keywords: incentives; innovation; intrinsic motivation; motivated agents; open source software; reciprocity; reputation
    JEL: L14 L17 L41 O31 O32
    Date: 2008–10

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