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Estimation of Loss in Consumer Surplus Resulting from Excessive Pricing of Telecommunication Services in Mexico

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  • Marta Stryszowska

    (Microeconomix)

Abstract

The present study evaluates the loss in consumer surplus caused by the low degree of competition in the Mexican telecommunication sector which results in relatively high prices, and also leads to lower levels of consumption across the range of telecommunication services. Econometric techniques are used in order to estimate the prices for telecommunication services and the corresponding numbers of subscriptions to telecommunication services that would have been observed in Mexico if there had been more competition in the Mexican telecommunication sector. The estimation relies on cross-country panel data from OECD countries. Estimates are undertaken for mobile and fixed telecommunication services and broadband services. The consumer harm in Mexico is estimated at USD 129.2 billion, or an average of USD 25.8 billion per year in terms of purchasing power parity over the period 2005-09. The latter amount is equivalent to 1.8% of Mexican GDP per year. Cette étude consiste en une évaluation de la perte de surplus du consommateur due à la faible concurrence dans le secteur des télécommunications au Mexique, qui se traduit par des prix relativement élevés, et qui entraine également une baisse des niveaux de consommation de toute la gamme des services de télécommunications. Elle a recours à des techniques économétriques pour estimer les prix des services de télécommunications et le nombre des abonnements à ces services qui auraient été souscrits au Mexique si le secteur national des télécommunications avait été soumis à une concurrence plus rude. Ses estimations ont été établies sur la base de données de panel internationales émanant des pays de l’OCDE, et concernent les services de télécommunications fixes et mobiles, ainsi que les services à haut débit. Les atteintes au consommateur au Mexique sont estimées à 129.2 milliards USD, soit une moyenne de 25.8 milliards USD par an en termes de parités de pouvoir d’achat sur la période allant de 2005 à 2009. Ce deuxième montant équivaut à 1.8 % du PIB du Mexique par an.

Suggested Citation

  • Marta Stryszowska, 2012. "Estimation of Loss in Consumer Surplus Resulting from Excessive Pricing of Telecommunication Services in Mexico," OECD Digital Economy Papers 191, OECD Publishing.
    • Handle: RePEc:oec:stiaab:191-en
    DOI: 10.1787/5k9gtw51j4vb-en
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    Cited by:

    1. Stratford, Beth, 2020. "The Threat of Rent Extraction in a Resource-constrained Future," Ecological Economics, Elsevier, vol. 169(C).
    2. Sawadogo, Fayçal, 2021. "Demand price elasticity of mobile voice communication: A comparative firm level data analysis," Information Economics and Policy, Elsevier, vol. 57(C).
    3. Jerry Hausman & Agustin Ros, 2013. "An econometric assessment of telecommunications prices and consumer surplus in Mexico using panel data," Journal of Regulatory Economics, Springer, vol. 43(3), pages 284-304, June.
    4. Mihail BUŞU, 2014. "How Concentrated Is The Romanian Mobile Market?," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 4, pages 473-482, July.
    5. Rodriguez Castelan,Carlos & Araar,Abdelkrim & Malasquez Carbonel,Eduardo Alonso & Olivieri,Sergio Daniel & Vishwanath,Tara, 2019. "Distributional Effects of Competition : A Simulation Approach," Policy Research Working Paper Series 8838, The World Bank.

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