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Analyzing Price Sensitivity Among Broadband Non-Adopters: Insights and Implications

This study explores the price sensitivity of broadband non-adopters, revealing that 53% of them report a lack of price sensitivity. Consequently, relying solely on price-incentive strategies will not bridge the broadband demand gap in America. The research highlights significant differences in price sensitivity among various demographics and the necessity for complementary programs like digital literacy training and awareness campaigns. Policymakers are urged to address these gaps effectively to close the digital divide.

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Analyzing Price Sensitivity Among Broadband Non-Adopters: Insights and Implications

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  1. Price Sensitivity of Broadband Non-Adopters Tom Koutsky February 7, 2013

  2. How much does price matter? 53% of non-adopters report not being price sensitive Price incentive strategies alone will not resolve the demand gap across America • If home broadband service was offered at a price you considered acceptable? I would not subscribe(not price sensitive) 53% I don’t know8%

  3. Price sensitive Non-adopters

  4. Barriers to Broadband Adoption

  5. Marginal Impact of Demographic Factors on Non-Adopters’ Price Sensitivity – Binary logistic MODEL = significant at 95% confidence

  6. Marginal Impact of Demographic Factorson Non-Adopters’ Price Sensitivity – EXPANDED MODEL = significant at 95% confidence

  7. observations • Price sensitivity is significantly different across various “vulnerable” demographics on the wrong side of the digital divide • Price-incentive broadband adoption programs will have different results across these demographic groups • Policy makers or marketing strategists should complement price incentive strategies with programs addressing other barriers to entry such asawareness campaigns, digital literacy training, or free/reduced hardware • If we rely on price subsidies alone, we will not close the digital divide

  8. For more INFORMATION… • Late to the Party: How New Broadband Subscribers Compare to Early Adopters, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1995130 • Let’s Make a Deal: Price Sensitivity and Willingness to Pay in the American Broadband Market, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2033415 • Connected Nation Research releases, including state-specific data reports: http://www.connectednation.org/research • Connected Nation Policy Briefs: http://www.connectednation.org/data-center-policy Tom Koutsky tkoutsky@connectednation.org (202) 674-8409

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