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The Consumer Loss of the Minimum Duration for Mobile Telephone Calls

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Author Info

  • Lukasz Grzybowski

    ()
    (University of Alicante)

  • Pedro Pereira

    ()
    (Autoridade da ConcorrĂȘncia)

Abstract

We estimate, for Portugal, the monetary loss per consumer of the existence of a minimum duration for mobile telephone calls. First, we estimate the demand for durations of calls, using individual level data and a Tobit model for panel data with individual random effects. The demand for duration is inelastic, and the elasticity varies across firms. At current prices, the average uncensored duration of calls ranges between 63-66 seconds, while with a minimum duration, the average duration is 101-109 seconds. The existence of a minimum duration for calls leads to a monetary loss for consumers of 35-40% of the average bill.

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Bibliographic Info

Paper provided by Portuguese Competition Authority in its series Working Papers with number 26.

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Length: 17 pages
Date of creation: Jul 2007
Date of revision:
Handle: RePEc:pca:wpaper:26

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Keywords: Mobile Telephony; Price Elasticities; Call Duration; Tobit model;

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