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The consumer welfare loss of minimum charges in mobile telephony

Author

Listed:
  • L. Grzybowski

    (SES - Département Sciences économiques et sociales - LTCI - Laboratoire Traitement et Communication de l'Information - Télécom ParisTech - IMT - Institut Mines-Télécom [Paris] - CNRS - Centre National de la Recherche Scientifique)

Abstract

This article estimates price elasticities of demand for the duration of mobile telephone calls for Portugal, as well as the monetary loss per consumer of the existence of a minimum duration of calls. The demand for the duration of calls is estimated using a Tobit model for panel data with individual random effects. The elasticity of demand is found to be small and to vary across firms. At current prices, the average duration of calls ranges between 101 and 109Â s, while the estimated average length of calls without minimum duration ranges between 63 and 66Â s. Hence, the existence of a minimum duration for calls results in a monetary loss of 35-40% of the average invoice.

Suggested Citation

  • L. Grzybowski, 2009. "The consumer welfare loss of minimum charges in mobile telephony," Post-Print hal-02286664, HAL.
    • Handle: RePEc:hal:journl:hal-02286664
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    More about this item

    Keywords

    L13; L43; L5; L96;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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