NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Geography and the Internet: Is the Internet a Substitute or a Complement for Cities?

Todd Sinai, Joel Waldfogel

NBER Working Paper No. 10028
Issued in October 2003
NBER Program(s):   IO   PE

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.

download in pdf format
   (205 K)

email paper

This paper is available as PDF (205 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Published: Sinai, Todd and Joel Waldfogel. "Geography And The Internet: Is The Internet A Substitute Or A Complement For Cities?," Journal of Urban Economics, 2004, v56(1,Jul), 1-24.

Users who downloaded this paper also downloaded these:
Mullainathan and Shleifer w9295 Media Bias
Durante and Knight w14762 Partisan Control, Media Bias, and Viewer Responses: Evidence from Berlusconi's Italy
Berry and Waldfogel w5528 Free Entry and Social Inefficiency in Radio Broadcasting
Jensen and Oster w13305 The Power of TV: Cable Television and Women's Status in India
Gentzkow, Glaeser, and Goldin w10791 The Rise of the Fourth Estate: How Newspapers Became Informative and Why It Mattered
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us