Geography and the Internet: Is the Internet a Substitute or a Complement for Cities? / Todd Sinai, Joel Waldfogel.

Format:

Book

Author/Creator:

Sinai, Todd.

Contributor:

National Bureau of Economic Research.

Waldfogel, Joel.

Series:

Working Paper Series (National Bureau of Economic Research) no. w10028.

NBER working paper series no. w10028

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Geography and the Internet

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2003.

Summary:

We study the tendency to connect to the Internet, and the online and offline shopping behavior of connected persons, to draw inferences about whether the Internet is a substitute or a complement for cities. We document that larger markets have more locally-targeted online content and that individuals are more likely to connect in markets with more local online content, suggesting the Internet is a complement to cities. Yet, holding local online content constant, people are less likely to connect in larger markets, indicating that the Internet is also a substitute for cities. We also find that individuals connect to overcome local isolation: notwithstanding a large digital divide, blacks are more likely to connect, relative to whites, when they comprise a smaller fraction of local population, making the Internet a substitute for agglomeration of preference minorities within cities. Finally, using online and offline spending data, we find that connected persons spend more on books and clothing online, relative to their offline spending, if they are farther from offline stores. This indicates that the Internet functions as a substitute for proximity to retail outlets.

Notes:

Print version record

October 2003.