The recent growth of the internet and changes in household-level demand for entertainment

This paper investigates whether the recent growth of the Internet complements or substitutes for consumption of existing entertainment goods. Applying a difference-in-differences approach to the Consumer Expenditure Survey, I find varying degrees of potential substitutability between Internet growth and consumer expenditures across different entertainment goods. For most goods, these negative effects appear to be sensitive to changes in specifications. In contrast, the negative effect on recorded music expenditure is statistically significant and robust to different specifications. (C) 2007 Elsevier B.V. All rights reserved.