Click versus Tap: The Substitution Effects of Smartphones on Computers

Abstract

With the prevalence of smartphones, it is important to understand the relationship between the smartphone channel and the computer channel. In this paper, we examine the extent to which smartphones substitute for or complement computers. We utilize unique panel data on individuals’ smartphone and computer usage, which contain detailed information on all domains and apps that individuals visit on their smartphones and computers. To examine the effect that smartphone usage has on computer usage, we exploit the panel nature of the data and use instrumental variables. We instrument for smartphone usage time with the use of the Android operating system version. We find that an increase in smartphone usage time decreases computer usage time, which indicates that smartphones and computers are overall substitutes. We find that the substitution pattern is greater on weekends compared to weekdays. We also examine how the effect of smartphone usage on computer usage differs across user characteristics. When we additionally examine the heterogeneity in substitution effects across domain and app categories, we find larger substitution effects for categories where computers may have been a dominant traditional digital channel prior to smartphones.