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Madden and Simpspn (1997). With the aggressive marketing of cable modems and ADSL service, a growing number of residential households in the U.S. now have a choice regarding how they access the Internet. The choice set available, however, is not uniform. In some areas, the only form of access is through dial-up modem, while in other areas various forms of high-speed access (cable modems or ADSL) are available as well. This paper reports the results from a set of models of Internet access where the models are differentiated by the availability of Internet access options. The models are based on the analysis of surveys submitted by over 20,000 households during the period January-March, 2000. 2 Among other things, we are able to report broadband penetration rates and compare those to Internet access estimates presented in the NTIA Report, Falling Through the Net: Toward Digital Inclusion. 3 In addition, we present a more complete set of estimated price elasticities for both basic and high-speed access to the Internet.

tell my undergraduate students in macro theory that economists know a lot about what makes consumers tick. However, in light of the experience of the past several years, I now state this proposition much more circumspectly, and perhaps should restrain myself altogether. For the fact is that in the last three or four years, the consumer has done few things predicted of him. To be sure, there have been some new elements in the picture: interest rates at the highest levels in a century; a "roaring" inflation, at least by contemporary U.S. standards; and a temporary tax increase. But even so, the consumer seems to have injected his own element of eccentricity. Among other things, he was thrifty in 1967 and the first half of 1968 on a scale then unprecedented for the postwar period. And while he regained his taste for spending in the last half of 1968, it was rather short-lived. For in the third quarter of 1969, the personal saving rate again began to rise, and from the third quarter of 1970 through the second quarter of 1971, was in excess of the unheard-of level of 8 percent. * Computations and research assistance supported by the National Science Foundation. I am grateful to members of the Brookings panel for comments and criticisms, toDaniel Weiserbs and Angelo Mascaro for research assistance, and to Joan Hinterbichler and Patricia Ramsey for secretarial assistance. I have also greatly benefited from access to an unpublished paper of H. S. Houthakker and S. D. Tendulkar, "The Dynamics of

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