“Relevance” and “Price” as Determinants of Internet Non-Adoption: A Review of the Evidence

Explaining non-adoption for Internet service has led to a debate about whether non-adopters place a low value on Internet use or whether the price of connectivity is too high. Survey evidence consistently points to a lack of interest as more important than price, but a new report by the National Digital Inclusion Alliance claims that recent survey evidence points to price as the dominant cause. The conclusion is impermissible. The surveys relied upon in the NDIA Report no longer permit respondents to indicate a lack of interest as the reason for not using the Internet at home, despite this reason being the most frequent response provided in earlier editions of these same surveys. A more thorough analysis of the surveys relied upon by the NDIA Report reveals that non-price factors dominate price as the determining factor for not using the Internet at home. Still, as price is a legitimate factor of adoption, if surveys are to be truly useful for policymaking, then they must abandon the current question seeking explanations for non-adoption and gather data that permit an estimate of price sensitivity.