Application-Based Quality Assessment of Internet Access Service
AbstractAs Internet applications become more sensitive to latency, the needs for network management increase. To maximize consumer surplus and profit of Internet service provider at the same time, it is necessary to investigate the consumer’s willingness to pay for a given quality of service (QoS) level. This study investigates consumer preferences for Internet access services that provide different levels of QoS for different applications. Conjoint method and mixed logit model are used to estimate consumer preference. As a result, consumers react most sensitively to changes in the quality of the web browsing service and have the highest marginal willingness to pay (MWTP) for improvements in the quality of this service. On the other hand, MWTPs are relatively low for voice over IP (VoIP) and IP television (IPTV), which are sensitive to latency. However, it is shown that the MWTPs of VoIP and IPTV increase when VoIP (IPTV) users are separated from VoIP (IPTV) non-users or when it is assumed that there is no substitute for VoIP (IPTV). It implies that Internet service providers can profit by providing high QoS to VoIP and IPTV as the markets for VoIP and IPTV services mature and user numbers increase.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Seoul National University; Technology Management, Economics, and Policy Program (TEMEP) in its series TEMEP Discussion Papers with number 201183.
Length: 24 pages
Date of creation: Nov 2011
Date of revision: Nov 2011
Quality of experience; quality of service; conjoint survey; mixed logit; Bayesian estimation; Internet.;
Find related papers by JEL classification:
- C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L5 - Industrial Organization - - Regulation and Industrial Policy
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Huber, Joel & Train, Kenneth, 2000.
"On the Similarity of Classical and Bayesian Estimates of Individual Mean Partworths,"
Department of Economics, Working Paper Series
qt7zm4f51b, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Joel Huber and Kenneth Train., 2000. "On the Similarity of Classical and Bayesian Estimates of Individual Mean Partworths," Economics Working Papers E00-289, University of California at Berkeley.
- Joel Huber & Kenneth Train, 2001. "On the Similarity of Classical and Bayesian Estimates of Individual Mean Partworths," Econometrics 0012003, EconWPA.
- Yeonbae Kim & Jeong-Dong Lee & Daeyoung Koh, 2005. "Effects of consumer preferences on the convergence of mobile telecommunications devices," Applied Economics, Taylor & Francis Journals, vol. 37(7), pages 817-826.
- Allenby, Greg M. & Rossi, Peter E., 1998. "Marketing models of consumer heterogeneity," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 57-78, November.
- Green, Paul E & Srinivasan, V, 1978. " Conjoint Analysis in Consumer Research: Issues and Outlook," Journal of Consumer Research, University of Chicago Press, vol. 5(2), pages 103-23, Se.
- Lee, Jongsu & Kim, Yeonbae & Lee, Jeong-Dong & Park, Yuri, 2006. "Estimating the extent of potential competition in the Korean mobile telecommunications market: Switching costs and number portability," International Journal of Industrial Organization, Elsevier, vol. 24(1), pages 107-124, January.
- M. Weeks, 2003. "Discrete choice methods with simulation, Kenneth E. Train, Cambridge University Press, 2003, ISBN: 0-521-81696-3, pp. 334," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(3), pages 379-383.
- Layton, David F., 2000. "Random Coefficient Models for Stated Preference Surveys," Journal of Environmental Economics and Management, Elsevier, vol. 40(1), pages 21-36, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jorn Altmann).
If references are entirely missing, you can add them using this form.