Econometric Modeling of Business Telecommunications Demand using RETINA and Finite Mixtures
AbstractIn this paper we estimate the business telecommunications demands for local,intra-LATA and inter-LATA services, using US data from a Bill Harvesting (R) survey carried out during 1997. We model heterogeneity, which is present among firms due to a variety of different business telecommunication needs, by estimating normal heteroskedastic mixture regressions. The results show that a three-component mixture model fits the demand for local services well, while a two-component structure is used to model intra-LATA and inter-LATA demand. We characterize the groups in terms of their differences among the coefficients, and then use RETINA to perform automatic model selection over an expanded candidate regressor set which includes heterogeneity parameters as well as transformations of the original variables. Our models improve substantially the in-sample fit as well the out-of-sample predictive ability over alternative candidate models. RETINA suggests that the final demand specification should include telephone equipment variables as relevant regressors. On the other hand, the output of the firm, as well as its physical extension, have second order, yet significant effects on the demand for telecommunication services. Estimated elasticities are different for the three demands but always positive for access form (single-line or private network).
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 EconWPA in its series Econometrics with number 0505003.
Length: 39 pages
Date of creation: 10 May 2005
Date of revision: 14 May 2005
Note: Type of Document - pdf; pages: 39
Contact details of provider:
Web page: http://188.8.131.52
Telecommunication Demand Models; Local calls; inter-LATA calls; intra-LATA calls; RETINA; Flexible Functional Forms; Heterogeneity; Finite Mixtures.;
Other versions of this item:
- Massimiliano Marinucci & Teodosio Pérez-Amaral, 2005. "Econometric modeling of business Telecommunications demand using Retina and Finite Mixtues," Documentos del Instituto Complutense de AnÃ¡lisis EconÃ³mico 0501, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales.
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-05-14 (All new papers)
- NEP-ECM-2005-05-14 (Econometrics)
- NEP-NET-2005-05-14 (Network Economics)
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.:
- Teodosio Perez-Amaral & Giampiero M. Gallo & Halbert L. White, 2003.
"A Flexible Tool for Model Building: the Relevant Transformation of the Inputs Network Approach (RETINA),"
Econometrics Working Papers Archive
wp2003_04, Universita' degli Studi di Firenze, Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti".
- Teodosio Perez-Amaral & Giampiero M. Gallo & Halbert White, 2003. "A Flexible Tool for Model Building: the Relevant Transformation of the Inputs Network Approach (RETINA)," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(s1), pages 821-838, December.
- Teodosio Perez-Amaral & Giampiero M. Gallo & Halbert White, 2003. "Flexible Tool for Model Building: the Relevant Transformation of the Inputs Network Approach (RETINA)," Documentos del Instituto Complutense de AnÃ¡lisis EconÃ³mico 0309, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales.
- Halbert L. White & Giampiero M. Gallo & Teodosio Pérez Amaral, 2002. "A flexible Tool for Model Building: the Relevant Transformation of the Inputs Network Approach (RETINA)," Documentos del Instituto Complutense de AnÃ¡lisis EconÃ³mico 0201, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales.
- Jeffrey Rohlfs, 1974. "A Theory of Interdependent Demand for a Communications Service," Bell Journal of Economics, The RAND Corporation, vol. 5(1), pages 16-37, Spring.
- White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA).
If references are entirely missing, you can add them using this form.