IDEAS home Printed from https://ideas.repec.org/a/eee/telpol/v43y2019i4p299-309.html
   My bibliography  Save this article

Pricing of mobile phone attributes at the retail level in a developing country: Hedonic analysis

Author

Listed:
  • Ahmad, Waseem
  • Ahmed, Tanvir
  • Ahmad, Bashir

Abstract

This study has been undertaken to determine the effect of mobile phone attributes on their retail market prices. A log-linear hedonic price model was fitted to a total of 348 handsets, for which data were collected about various attributes from different websites, while the price data were obtained from mobile phone retailers in two major cities of Pakistan from November 2016 to February 2017. Results indicate that brand, battery capacity, weight, operating system, RAM, memory size and display size have a significant positive effect on mobile phone prices. Given the significant premium associated with various characteristics, manufacturers need to formulate strategies to emphasize the battery capacity of 2000-3000 mAH, RAM of more than 1GB, screen size of more than 5 inches, memory size of more than 8GB, back camera of over 15MP, 4G network mode, front camera and FM radio.

Suggested Citation

  • Ahmad, Waseem & Ahmed, Tanvir & Ahmad, Bashir, 2019. "Pricing of mobile phone attributes at the retail level in a developing country: Hedonic analysis," Telecommunications Policy, Elsevier, vol. 43(4), pages 299-309.
    • Handle: RePEc:eee:telpol:v:43:y:2019:i:4:p:299-309
    DOI: 10.1016/j.telpol.2018.10.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0308596118301629
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.telpol.2018.10.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ministry of Finance, Government of India,, 2017. "Economic Survey 2016-17," OUP Catalogue, Oxford University Press, edition 2, number 9780199477661.
    2. Waseem Ahmad & Sven Anders, 2012. "The Value of Brand and Convenience Attributes in Highly Processed Food Products," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 60(1), pages 113-133, March.
    3. Edward Oczkowski, 1994. "A Hedonic Price Function For Australian Premium Table Wine," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 38(1), pages 93-110, April.
    4. Kennedy, Peter E, 1981. "Estimation with Correctly Interpreted Dummy Variables in Semilogarithmic Equations [The Interpretation of Dummy Variables in Semilogarithmic Equations]," American Economic Review, American Economic Association, vol. 71(4), pages 801-801, September.
    5. Hausman, Jerry, 1999. "Cellular Telephone, New Products, and the CPI," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(2), pages 188-194, April.
    6. World Bank, 2017. "World Development Indicators 2017," World Bank Publications - Books, The World Bank Group, number 26447, December.
    7. Brown, Jeff E. & Ethridge, Don E., 1995. "Functional Form Model Specification: An Application To Hedonic Pricing," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 24(2), pages 1-8, October.
    8. Dewenter, Ralf & Haucap, Justus & Luther, Ricardo & Rötzel, Peter, 2007. "Hedonic prices in the German market for mobile phones," Telecommunications Policy, Elsevier, vol. 31(1), pages 4-13, February.
    9. José A. Montenegro & José L. Torres, 2016. "Consumer preferences and implicit prices of smartphone characteristics," Working Papers 2016-04, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
    10. Li Cai & Andrew F. Hayes, 2008. "A New Test of Linear Hypotheses in OLS Regression Under Heteroscedasticity of Unknown Form," Journal of Educational and Behavioral Statistics, , vol. 33(1), pages 21-40, March.
    11. Cropper, Maureen L & Deck, Leland B & McConnell, Kenneth E, 1988. "On the Choice of Functional Form for Hedonic Price Functions," The Review of Economics and Statistics, MIT Press, vol. 70(4), pages 668-675, November.
    12. Martínez-Garmendia, Josué, 2010. "Application of hedonic price modeling to consumer packaged goods using store scanner data," Journal of Business Research, Elsevier, vol. 63(7), pages 690-696, July.
    13. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    14. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    15. Timothy C. Haab & Kenneth E. McConnell, 2002. "Valuing Environmental and Natural Resources," Books, Edward Elgar Publishing, number 2427.
    16. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    17. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    18. MacKinnon, James G. & White, Halbert, 1985. "Some heteroskedasticity-consistent covariance matrix estimators with improved finite sample properties," Journal of Econometrics, Elsevier, vol. 29(3), pages 305-325, September.
    19. Brown, Jeff E. & Ethridge, Don E., 1995. "Functional Form Model Specification: An Application to Hedonic Pricing," Agricultural and Resource Economics Review, Cambridge University Press, vol. 24(2), pages 166-173, October.
    20. Sayed Mahdi Mostafavi & Somaye Sadat Roohbakhsh & Mehdi Behname, 2013. "Hedonic Price Function Estimation for Mobile Phone in Iran," International Journal of Economics and Financial Issues, Econjournals, vol. 3(1), pages 202-205.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Oughton, Edward J. & Comini, Niccolò & Foster, Vivien & Hall, Jim W., 2022. "Policy choices can help keep 4G and 5G universal broadband affordable," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    2. Edward J Oughton & Niccol`o Comini & Vivien Foster & Jim W Hall, 2021. "Policy choices can help keep 4G and 5G universal broadband affordable," Papers 2101.07820, arXiv.org, revised Feb 2021.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert J. Hill & Daniel Melser, 2008. "Hedonic Imputation And The Price Index Problem: An Application To Housing," Economic Inquiry, Western Economic Association International, vol. 46(4), pages 593-609, October.
    2. Lisi, Gaetano & Iacobini, Mauro, 2012. "Estimation of a Hedonic House Price Model with Bargaining: Evidence from the Italian Housing Market," MPRA Paper 66474, University Library of Munich, Germany.
    3. Girma Kassie & Awudu Abdulai & Clemens Wollny, 2011. "Heteroscedastic hedonic price model for cattle in the rural markets of central Ethiopia," Applied Economics, Taylor & Francis Journals, vol. 43(24), pages 3459-3464.
    4. Kevin Hoefman & Aaron Bramson & Koen Schoors & Jan Ryckebusch, 2018. "The impact of functional and social value on the price of goods," PLOS ONE, Public Library of Science, vol. 13(11), pages 1-12, November.
    5. Mauro Iacobini & Gaetano Lisi, 2016. "Prezzi edonici delle caratteristiche abitative e analisi di regressione multipla: suggerimenti pratici per la stima," RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO, FrancoAngeli Editore, vol. 2016(2), pages 5-42.
    6. Smed, Sinne & Hansen, Lars Garn, 2018. "Consumer Valuation of Health Attributes in Food," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(2), May.
    7. Luigi Benfratello & Massimiliano Piacenza & Stefano Sacchetto, 2004. "-What Drives Market Prices in the Wine Industry ? Estimation of a Hedonic Model for Italian Premium Wines," CERIS Working Paper 200411, CNR-IRCrES Research Institute on Sustainable Economic Growth - Torino (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY.
    8. Bodo E. Steiner, 2004. "Australian wines in the British wine market: A hedonic price analysis," Agribusiness, John Wiley & Sons, Ltd., vol. 20(3), pages 287-307.
    9. Janmaat, John A, 2007. "Factors Affecting Residential Property Values in a Small Historic Canadian University Town," MPRA Paper 6145, University Library of Munich, Germany.
    10. José A. Montenegro & José L. Torres, 2016. "Consumer preferences and implicit prices of smartphone characteristics," Working Papers 2016-04, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
    11. Wieser, Robert, 2009. "Parameterstabilität in hedonischen Bodenpreismodellen [Stability of Parameters in Hedonic Urban Land Price Models]," MPRA Paper 65859, University Library of Munich, Germany.
    12. Chuanwang Sun & Xiaochun Meng & Shuijun Peng, 2017. "Effects of Waste-to-Energy Plants on China’s Urbanization: Evidence from a Hedonic Price Analysis in Shenzhen," Sustainability, MDPI, vol. 9(3), pages 1-18, March.
    13. David E. Clark, 2005. "The Effects of Ignoring Train Whistle Bans on Residential Property Values," Working Papers and Research 0504, Marquette University, Center for Global and Economic Studies and Department of Economics.
    14. Alessandro Bonanno & Francesco Bimbo & Marco Costanigro & Alfons Oude Lansink & Rosaria Viscecchia, 2019. "Credence attributes and the quest for a higher price – a hedonic stochastic frontier approach," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 46(2), pages 163-192.
    15. Gaetano Lisi, 2011. "The Hedonic Price Function in a Matching Model of Housing Market," Economics Bulletin, AccessEcon, vol. 31(3), pages 2347-2355.
    16. Lundhede, Thomas Hedemark & Jacobsen, Jette Bredahl & Thorsen, Bo Jellesmark, 2015. "A hedonic analysis of the complex hunting experience," Journal of Forest Economics, Elsevier, vol. 21(2), pages 51-66.
    17. Steven S. Vickner, 2015. "Estimating the Implicit Price of Convenience: A Hedonic Analysis of the US Breakfast Sausage Market," Agribusiness, John Wiley & Sons, Ltd., vol. 31(2), pages 281-292, April.
    18. David E. Clark, 2006. "Externality Effects on Residential Property Values: The Example of Noise Disamenities," Growth and Change, Wiley Blackwell, vol. 37(3), pages 460-488, September.
    19. Steiner, Bodo E., 2002. "The Valuation Of Labelling Attributes In A Wine Market," 2002 Annual meeting, July 28-31, Long Beach, CA 19718, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Wesley Nimon & John Beghin, 1999. "Are Eco-Labels Valuable? Evidence From the Apparel Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 801-811.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:telpol:v:43:y:2019:i:4:p:299-309. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.