Race and Broadband Adoption: A Decomposition Analysis

As governments push for universal adoption of broadband Internet service, policies must address the fact that many households with access to the service do not to subscribe to it. Lower adoption rates in some minority communities are one cause for concern. A confounding factor with respect to race is that it is often correlated with income, education, and other factors that drive Internet adoption in the home. Do these differences in socio-economic resources fully explain the difference in adoption rates? I decompose the effects of socio-economic factors on broadband adoption distinct from the effects of race. My analysis finds that differences in socio-economic resources like income and education do relatively little to explain the differences in adoption among racial groups. The demand for broadband appears to be influenced by unobserved factors correlated with race. It appears, therefore, that addressing the lack of adoption of the Internet at home may require remedial measures targeting specific minority groups rather than uniform policies that address socio-economic resources like income.