Role of next generation access networks on COVID-19 propagation: Empirical assessment with a dynamic multinomial discrete choice model framework

Abstract

Through the application of discrete choice and machine learning models, the primary objective of this study is to assess the impact of NGA networks coverage on reducing the risk of contagion during the first wave of COVID-19 across 278 municipalities in mainland Portugal, while controlling for other domains under the tutelage of the local public administration. Benchmark estimations reveal that, while holding everything else constant, each spatial unit is 2.4 p.p. more likely to become a high-risk municipality with additional 10 ​000 cabled houses with NGA networks. In a multinomial discrete choice model setting, the technical novelty of this study lies in providing graphical visualization and economic interpretation of coefficients and average marginal effects as a function of the number of classes used to define the dependent variable, while ensuring the satisfaction of the IIA assumption. The positive and significant coefficients of NGA indicate that additional coverage of NGA networks increases the likelihood of municipalities becoming high-risk for increasing number of spatial units not belonging to the low-risk efficiency frontier. The significant, negative, and decreasing average marginal effects of NGA suggest that the ability to remain a low-risk municipality diminishes with increasing NGA networks coverage as the number of municipalities belonging to the low-risk efficiency frontier decreases. The analysis also confirms that the effect of NGA networks coverage on COVID-19 is statistically significant in the indirect channel. This impact persists due to the mediation of population density, which is directly influenced by NGA networks coverage. All these findings can be explained by the fact that benefits related to productive activities do not outweigh costs associated with leisure time. Hence, this research emphasizes the need for a normative discussion on the intended purpose of digital technologies built on top of NGA networks to ensure a level playing field in the post-pandemic era.