Does closeness in virtual space complement urban space?

The rapid growth of the internet poses a challenge for understanding how cities will grow in the future. An advantage of the internet is that groups can be close, in terms of interactions, without being close in physical space. Thus the internet may substitute for urban areas. Or the internet may in...

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Bibliographic Details
Published in:Socio-economic planning sciences 2017-06, Vol.58, p.22-29
Main Authors: Craig, Steven G., Hoang, Edward C., Kohlhase, Janet E.
Format: Article
Language:English
Subjects:
Closeness
Communication
Communications
Complementarity
Complements
Consumers
Interactions
Internet
Internet access
Internet demand
Social interaction
States
Urban areas
Urban development
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Summary:The rapid growth of the internet poses a challenge for understanding how cities will grow in the future. An advantage of the internet is that groups can be close, in terms of interactions, without being close in physical space. Thus the internet may substitute for urban areas. Or the internet may increase the extent and scope of interactions so that the internet complements physical closeness. We compare the two possibilities, and using data from US states show that urban areas increase the per-capita demand for internet access, suggesting a complementary relation. The complementarity emanates more from consumers than producers. •Investigates whether internet access is a complement or substitute for urban areas.•Estimates per-capita demand for high-speed internet connections by OLS and IV.•Uses panel data for US states from 2000 to 2011.•Finds demand for internet positively related to measures of urban concentration.
ISSN:0038-0121
1873-6041
DOI:10.1016/j.seps.2016.11.002