Gabriel Ahlfeldt, Pantelis Koutroumpis, Tommaso Valletti, 04 February 2016

Many governments are committed to promoting the roll-out of fibre optic broadband networks. Little is known, however, about the economic value of these investments. Using house prices to infer the value of high-speed internet access, this column discusses the impact of fibre optic broadband in England. A fast broadband connection is found to increase house prices sufficiently in urban areas to pass a cost-benefit test, but the case for universal delivery in rural areas is not as strong. And even in areas where people are willing to pay for a faster connection, internet providers may be unwilling to deliver it only to see house-sellers appropriate the rent from their investments.

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