Broadband Price Elasticity in EU and EasternPartnership Countries: Evidence of a Decade-LongTransformation (2010–2024)

Broadband Price Elasticity in EU and EasternPartnership Countries: Evidence of a Decade-LongTransformation (2010–2024) | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Broadband Price Elasticity in EU and EasternPartnership Countries: Evidence of a Decade-LongTransformation (2010–2024) Samir Orujov, Ilgar Ismayilov, Jeyhun Huseynzade This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-9390811/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Has broadband become a necessity good immune to price changes? Using a15-year panel of 33 countries—27 European Union (EU) member states and6 Eastern Partnership (EaP) countries (2010–2024)—and two-way fixed effectswith Driscoll–Kraay standard errors, we document a fundamental transformation in broadband demand. Pre-COVID, EaP countries exhibited relatively elastic demand (ε = −0.60, p<0.001)—a 10% price reduction increased subscriptionsby 6.0%—while EU countries showed lower elasticity (ε = −0.10, p<0.10). By 2020–2024, both regions converged to near-zero elasticity, with price changes having no detectable effect on adoption. Crucially, placebo tests reveal this transformation began in 2015, not 2020, indicating a decade-long digital integration process rather than a COVID-19 shock. We further demonstrate that price measurement critically affects inference: income-relative prices (as % of gross national income, GNI) yield significant EaP elasticities in all specifications, whereas purchasing-power-parity (PPP) adjusted prices yield significant results in only 12% of EaP specifications; for EU countries, all three price measures perform broadly similarly. These findings have immediate policy relevance: as broadband transitions from discretionary service to essential utility, policy emphasis must shift from affordability subsidies to universal infrastructure deployment. Broadband demand Price elasticity Eastern Partnership European Union COVID-19 Digital transformation Full Text Additional Declarations No competing interests reported. Supplementary Files ESM1.pdf Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-9390811","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":627511100,"identity":"8be42718-690b-48cf-a8cf-0420d43c3b8b","order_by":0,"name":"Samir Orujov","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA9ElEQVRIiWNgGAWjYBAC+/b+hw8+/vkvx898ACLCRkiLAc8ZZsOZDczGkm0JxGqR8GGT5mxgTtxwLIFIh5lL8B6QZtzBxrj5GPszCYaaw3l8DMyPP+DTYjm7L8G48AwPs9kxHjMJhmOHi9kY2AwM8Fpz54BB8gw2CTaz+z3MBowNhxPbGHgY8LvxRoLBYR42Ax7jNvbHcC0H8OkwuJFj2MzbliBhwMZg+ACqhbEBnxbJnmPJjDPOHDCQOMZj+CDhWHpiGzObMV538bM3H//xoeJAfX8b+4MDH2qsE+e3N+MPMVSQACKYiVc/CkbBKBgFowAHAACmOElB89gDQQAAAABJRU5ErkJggg==","orcid":"","institution":"Center for Economic Research and Graduate Education – Economics Institute","correspondingAuthor":true,"prefix":"","firstName":"Samir","middleName":"","lastName":"Orujov","suffix":""},{"id":627511102,"identity":"c2fd06c5-d7c3-4f8a-8bd3-e4ec2602dcca","order_by":1,"name":"Ilgar Ismayilov","email":"","orcid":"","institution":"Charles University","correspondingAuthor":false,"prefix":"","firstName":"Ilgar","middleName":"","lastName":"Ismayilov","suffix":""},{"id":627511104,"identity":"a387e80b-c809-4411-945a-dcd87fe1dfe3","order_by":2,"name":"Jeyhun Huseynzade","email":"","orcid":"","institution":"Information Communication Technologies Agency","correspondingAuthor":false,"prefix":"","firstName":"Jeyhun","middleName":"","lastName":"Huseynzade","suffix":""}],"badges":[],"createdAt":"2026-04-11 23:23:16","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-9390811/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-9390811/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":109502453,"identity":"c67e829c-7242-4230-9517-65b814eb2463","added_by":"auto","created_at":"2026-05-18 23:54:15","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":361729,"visible":true,"origin":"","legend":"","description":"","filename":"springersubmission.pdf","url":"https://assets-eu.researchsquare.com/files/rs-9390811/v1_covered_161564a7-a3a6-47dd-85eb-88dc40e770bc.pdf"},{"id":107633917,"identity":"4425c771-5ce8-4789-9690-95bdd1c83825","added_by":"auto","created_at":"2026-04-23 12:14:35","extension":"pdf","order_by":0,"title":"","display":"","copyAsset":false,"role":"supplement","size":356795,"visible":true,"origin":"","legend":"","description":"","filename":"ESM1.pdf","url":"https://assets-eu.researchsquare.com/files/rs-9390811/v1/7ff815f639ec96dbf76fb6d2.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Broadband Price Elasticity in EU and EasternPartnership Countries: Evidence of a Decade-LongTransformation (2010–2024)","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Broadband demand, Price elasticity, Eastern Partnership, European Union, COVID-19, Digital transformation","lastPublishedDoi":"10.21203/rs.3.rs-9390811/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-9390811/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"Has broadband become a necessity good immune to price changes? Using a15-year panel of 33 countries—27 European Union (EU) member states and6 Eastern Partnership (EaP) countries (2010–2024)—and two-way fixed effectswith Driscoll–Kraay standard errors, we document a fundamental transformation in broadband demand. Pre-COVID, EaP countries exhibited relatively elastic demand (ε = −0.60, p\u003c0.001)—a 10% price reduction increased subscriptionsby 6.0%—while EU countries showed lower elasticity (ε = −0.10, p\u003c0.10). By 2020–2024, both regions converged to near-zero elasticity, with price changes having no detectable effect on adoption. Crucially, placebo tests reveal this transformation began in 2015, not 2020, indicating a decade-long digital integration process rather than a COVID-19 shock. We further demonstrate that price measurement critically affects inference: income-relative prices (as % of gross national income, GNI) yield significant EaP elasticities in all specifications, whereas purchasing-power-parity (PPP) adjusted prices yield significant results in only 12% of EaP specifications; for EU countries, all three price measures perform broadly similarly. 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