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The Complementarity between Calls and Messages in Mobile Telephony

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Author Info

  • Lukasz Grzybowski

    ()
    (University of Alicante)

  • Pedro Pereira

    ()
    (Autoridade da Concorrência)

Abstract

This article estimates the price elasticities of the demand for mobile telephone calls and the demand for messages for Portugal. We use a panel of individual level data. In order to account for the unobserved individual heterogeneity and for the data censoring, we estimate a Tobit model for panel data with individual random effects. The demand for calls and the demand for messages are inelastic. Calls and messages are complements.

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Bibliographic Info

Paper provided by Portuguese Competition Authority in its series Working Papers with number 27.

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Length: 19 pages
Date of creation: Jul 2007
Date of revision:
Handle: RePEc:pca:wpaper:27

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Keywords: Mobile Telephony; Price Elasticities; SMS; Complementarity;

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References

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  1. Andersson, Kjetil & Foros, Øystein & Steen, Frode, 2006. "Text and Voice: Complements, Substitutes or Both?," CEPR Discussion Papers 5780, C.E.P.R. Discussion Papers.
  2. Heitfield, Erik & Levy, Armando, 2001. "Parametric, semi-parametric and non-parametric models of telecommunications demand: An investigation of residential calling patterns," Information Economics and Policy, Elsevier, vol. 13(3), pages 311-329, September.
  3. Greene, William, 1999. "Marginal effects in the censored regression model," Economics Letters, Elsevier, vol. 64(1), pages 43-49, July.
  4. Rappoport, Paul N. & Taylor, Lester D., 1997. "Toll price elasticities estimated from a sample of U.S. residential telephone bills," Information Economics and Policy, Elsevier, vol. 9(1), pages 51-70, March.
  5. Rodini, Mark & Ward, Michael R. & Woroch, Glenn A., 0. "Going mobile: substitutability between fixed and mobile access," Telecommunications Policy, Elsevier, vol. 27(5-6), pages 457-476, June.
  6. Kridel, Donald J. & Rappoport, Paul N. & Taylor, Lester D., 2002. "IntraLATA long-distance demand: carrier choice, usage demand and price elasticities," International Journal of Forecasting, Elsevier, vol. 18(4), pages 545-559.
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Citations

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Cited by:
  1. Lukasz Grzybowski & Pedro Pereira, 2007. "Merger Simulation in Mobile Telephony in Portugal," Working Papers 07-12, NET Institute, revised Sep 2007.
  2. Leon Zucchini & Tobias Kretschmer, 2012. "Competitive Pressure: Competitive Dynamics as Reactions to Multiple Rivals," DRUID Working Papers 12-03, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  3. Basalisco, Bruno, 2012. "The effect of user interaction on the demand for mobile text messages: Evidence from cross-country data," Information Economics and Policy, Elsevier, vol. 24(2), pages 132-144.
  4. Lukasz Grzybowski & Pedro Pereira, 2011. "Subscription Choices and Switching Costs in Mobile Telephony," Review of Industrial Organization, Springer, vol. 38(1), pages 23-42, January.
  5. Vogelsang, Ingo, 2010. "The relationship between mobile and fixed-line communications: A survey," Information Economics and Policy, Elsevier, vol. 22(1), pages 4-17, March.

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