Three-Part Tariffs and Short-Run Rationality in the Local Fixed Telephone Consumption: Empirical Evidence from Medellín
AbstractIn this paper we are interested in investigating the effects of the threepart tariffs system on consumers’ behavior in the local fixed telephone service provided by the incumbent Telecommunications Company une in Medellín, which was authorized by the Telecommunications Regulatory Commission (crt, for its Spanish name). In order to study consumer behavior and the effect of this tariff system we specify a sort of Engel Curve, which relates expenditure in fixed telephone service and expenditure in public utilities. Endogeneity problems could well arise from this specification, so the empirical strategy for studying households’ consumption is based on a panel data analysis by performing instrumental variables and gmm procedures. Our results supports the hypothesis that consumers surpass expected consumption levels and therefore the total payment for the service is greater than planned, showing a sort of short-run irrationality in consumption.
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Bibliographic InfoArticle provided by UNIVERSIDAD DE LOS ANDES-CEDE in its journal REVISTA DESARROLLO Y SOCIEDAD.
Volume (Year): (2010)
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Other versions of this item:
- David Tobón Orozco, 2010. "Three-Part Tariffs and Short-Run Rationality in the Local Fixed Telephone Consumption: Empirical Evidence from Medellín," Grupo MicroeconomÃa Aplicada 058, Universidad de Antioquia, Departamento de Economía.
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D60 - Microeconomics - - Welfare Economics - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard Blundell & Alan Duncan & Krishna Pendakur, 1998. "Semiparametric estimation and consumer demand," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(5), pages 435-461.
- Banks, J & Blundell, R & Lewbel, A, 1997.
"Quadratic engel curves and consumer demand,"
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- repec:bla:restud:v:77:y:2010:i:1:p:30-60 is not listed on IDEAS
- Brown,Stephen J. & Sibley,David Sumner, 1986. "The Theory of Public Utility Pricing," Cambridge Books, Cambridge University Press, number 9780521314008, October.
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