The correlation between broadband prices and the digital divide: A survey of Taiwan’s north coast

Abstract

This study highlights the importance of differentiating between urban and rural areas when exploring broadband issues that matter to consumers and statistically sampling accordingly. To test the effectiveness of rural broadband programmes in improving internet usage, this study is based on a selection of five geographically adjacent administrative districts with varying population densities.

During a survey using the double-bounded dichotomous choice model to measure people’s WTP, two research hypotheses were tested and verified through regression analysis. The results showed that consumers living in rural areas are significantly less willing to pay for broadband than those living in urban areas, which contradicts the findings of the study by Worden and Hambly (2022) conducted in Canada.

Additionally, the significant t value test results found in this study showed that consumers are willing to pay more for download bandwidth than for upload bandwidth for every dollar spent. This result indicates that consumers have a clear preference for one over the other and highlights significant differences in their choices.

In particular, the results of the willingness-to-pay survey revealed that the incumbent operator yield opposite results in the regression coefficients for their willingness to pay for each unit of download bandwidth and upload bandwidth. This result may be due to differences in the design of internet products offered by the two operators.

Given the inevitable reality that income generated by service operators in rural areas is lower than that in urban areas, there is a need to study price differentials between urban and rural areas in order to promote greater use of broadband internet in rural areas in the context of the adoption of a single price throughout the region.