Estimating the Demand for Bandwidth
Hal R. Varian · 2000
One experiment in the INDEX Project o#ered users di#erent bandwidths for di#erent prices. We use the data from this experiment to estimate the demand for bandwidth and the value of waiting time for users. The parameter estimates for the demand functions for bandwidth are plausible and well-behaved. The parameter estimates for the value of time are, on average, very low, but there are some subjects with relatively high time values. The INDEX Project is an experiment designed to estimate how much people are willing to pay for various kinds of Internet Quality of Service (QoS). We have architected the system so as to provide di#erent QoS's on demand and record the usage of each di#erent QoS by each user. Users can change their requested QoS instantaneously and are billed monthly for their usage. Since April 1998 we have been providing approximately 70 users at UC Berkeley with residential ISDN service through the INDEX Project. Edell and Variaya [1999] provides an overview of the projec...