An Econometrics Model of Internet Access Demand in Europe

An Econometrics Model of Internet Access Demand in Europe


A project presented to the Economics Department of the London School of Economics in May 2003 in fulfilment of the requirements for the course of Quantitative Economics Project.


This project presents an empirical study of Internet access demand in Europe. It considers more than 450000-pooled cross-European data for 1997, 1998 and 2000. The analysis includes attributes of the choice and the decision-maker. The logit model reveals that the dominant drivers of the demand are non-price factors. It appears that it is fuelled by qualitative access and usage externalities; the dynamics of information exchange and search. The marginal utility an individual derives from internet access interdepends both on the number (search) and the profile (exchange) of already-existing subscribers. The project concludes that the participation in the internet economy depends on human capital factors and the scarcity of access devices. Therefore, computing training has increased probabilities to widen access.


I would like to thank Professor Christopher Pissarides for supervising this work.

Full Work

The full work on this project can be accessed here.