Estimating the value of lost telecoms connectivity

  • Authors:
  • Sean Lyons;Edgar Morgenroth;Richard S. J. Tol

  • Affiliations:
  • Economic and Social Research Institute, Whitaker Square, Sir John Rogerson's Quay, Dublin 2, Ireland and Department of Economics, Trinity College, Dublin, Ireland;Economic and Social Research Institute, Whitaker Square, Sir John Rogerson's Quay, Dublin 2, Ireland and Department of Economics, Trinity College, Dublin, Ireland;Department of Economics, University of Sussex, Brighton, United Kingdom and Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands and Department for Spatial Economics ...

  • Venue:
  • Electronic Commerce Research and Applications
  • Year:
  • 2013

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Abstract

We describe a practical method for estimating the economic cost of outages in electronic communications networks, accommodating temporal, geographical and sectoral variations in incidence. The method is illustrated with two types of examples: a hypothetical outage of the main fixed line network operator in Ireland, and seven examples of outages affecting individual local exchanges in areas with concentrations of technology-intensive employment or dense residential population. The national fixed line outage has an estimated cost of @?42-50 per household-day arising from effects on the productive and residential sectors, with possible further losses from effects on retail payments and high societal value facilities such as emergency services. Estimated quantifiable economic costs from outages affecting a single local exchange range from @?370,000 to @?1.1 million per day.