Intra-Household Effects on Demand for Telephone Service: Empirical Evidence
AbstractI present a game-theoretical model to estimate consumption demand, accounting for intra-household interaction among household members. Although multiple Nash equilibria of consumption decisions may exist in a household, model parameters are pointwise identified from household-level data for households with only two members. I propose a semiparametric maximum likelihood estimator and apply it to empirically analyze the subscription decision for cellular phone service in Taiwan. On average, a consumer's probability of subscribing to cellular service rises 35 percentage points when the other household member chooses to subscribe. This result suggests the existence of intra-household network effects on cellular phone consumption. The intra-household effect increases in household income, but decreases in the number of kids and the age difference in a household.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 6813.
Date of creation: Jan 2008
Date of revision:
consumption externality; multiple Nash equilibria; demand estimation; mobile phone service; cellular phone service; network effect;
Other versions of this item:
- Ching-I Huang, 2013. "Intra-household effects on demand for telephone service: Empirical evidence," Quantitative Marketing and Economics, Springer, vol. 11(2), pages 231-261, June.
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-01-26 (All new papers)
- NEP-MIC-2008-01-26 (Microeconomics)
- NEP-NET-2008-01-26 (Network Economics)
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