Broadband internet speed upgrades and the farmland market: A shift‐share instrumental variable approach

Abstract Access to reliable and affordable high‐speed internet is critical for economic growth, and broadband internet access is of particular concern in rural America. As the United States continues to invest in this vital infrastructure, we provide the first empirical examination of the impact of broadband internet speed upgrades on farm‐level sale prices and county‐level cash rents in 12 Midwestern US states from 2016 to 2021. We employ a Bartik shift‐share instrument with broadband technology shares to address the potential endogeneity in the deployment and upgrades of broadband internet. Our results indicate that a one megabit per second (Mbps) increase in download speed raises farmland sale prices by 0.268% and county‐level cash rents by 0.070%. Additionally, a one‐percentage‐point increase in the download speed growth rate leads to a 0.041 percentage point increase in the growth rate of county‐level cash rents. By decomposing the Bartik shift‐share instrument, we demonstrate that the exogeneity of the initial market share of satellite technology contributes most to identification. Our research provides valuable insights for policymaking by quantifying the return on broadband investment and identifying areas and types of farms that benefit more from higher internet speed.