OEA Working Paper 50
Abstract: This paper uses data on broadband connections and the production and sales of agricultural products to empirically estimate the impact of improved connectivity on U.S. farming outcomes. The Federal Communications Commission has detailed data on broadband subscriptions from its semi-annual Form 477 collection. The USDA’s National Agricultural Statistics Service (NASS) releases a complete census of agriculture every five years to measure agricultural activity. By pairing periodic releases of the Form 477 data collection with information on farm production expenses and crop yields from corresponding releases of the Census of Agriculture, the analysis directly evaluates the benefit of rural broadband development on the U.S. farming industry. Overall, I find evidence of crop yield improvements from increased Internet penetration rates at thresholds of 25 Megabits-per-second download and 3 Megabits-per-second upload speeds. Among the findings, a 1% increase in the number of 25+/3+ connections per 1,000 households is associated with a 3.6% increase in corn yields, as measured in bushels per acre. I also find some evidence of cost savings at thresholds of 10 Megabits-per-second download and 0.768 Megabitsper-second upload speeds. A 1% increase in the number of 10+/0.768+ connections per 1,000 households is associated with a 2.4% decrease in operating expenses per farm operation. The paper also provides an introductory look at changes in the composition and speed thresholds of connectivity available for selected field crops over time.