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Demand Elasticities for Mobile Telecommunications in Austria

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  • Dewenter, Ralf
  • Haucap, Justus

Abstract

This paper analyses price elasticities in the Austrian market for mobile telecommunications services using data on firm specific tariffs in the period between January 1998 and March 2002. Dynamic panel data regressions are used to estimate short-run and long-run demand elasticities for business customers and for private consumers with both postpaid contracts and prepaid cards.We find that business customers have a higher elasticity of demand than private consumers, where postpaid customers tend to have a higher demand elasticity than prepaid customers. Also demand is generally more elastic in the long run. In addition, the paper also provides estimates for firm-specific demand elasticities which range from -0.47 to -1.1.

Suggested Citation

  • Dewenter, Ralf & Haucap, Justus, 2007. "Demand Elasticities for Mobile Telecommunications in Austria," Ruhr Economic Papers 17, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:17
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    Cited by:

    1. Sawadogo, Fayçal, 2021. "Demand price elasticity of mobile voice communication: A comparative firm level data analysis," Information Economics and Policy, Elsevier, vol. 57(C).
    2. Harbord, David & Hoernig, Steffen, 2010. "Welfare Analysis of Regulating Mobile Termination Rates in the UK (with an Application to the Orange/T-Mobile Merger)," MPRA Paper 21515, University Library of Munich, Germany.
    3. Katz, Raúl & Jung, Juan, 2023. "The impact of taxation in the telecommunications industry," Information Economics and Policy, Elsevier, vol. 62(C).
    4. Growitsch, Christian & Marcus, J. Scott & Wernick, Christian, 2010. "Auswirkungen niedrigerer Mobilterminierungsentgelte auf Endkundenpreise und Nachfrage," WIK Discussion Papers 345, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    5. Kongaut, Chatchai & Bohlin, Erik, 2012. "Impacts of mobile termination rates (MTRs) on retail prices: The implication for regulators," 23rd European Regional ITS Conference, Vienna 2012 60348, International Telecommunications Society (ITS).
    6. David Harbord & Steffen Hoernig, 2015. "Welfare Analysis of Regulating Mobile Termination Rates in the U.K," Journal of Industrial Economics, Wiley Blackwell, vol. 63(4), pages 673-703, December.
    7. Golovanova, Svetlana V. (Головановаб Светлана) & Korneeva, Dina V. (Корнеева, Дина) & Sidorova, Elena E. (Сидорова, Елена) & Yusupova, Gyuzel F. (Юсоповаб Гюзель), 2019. "Single Wholesale Network for 5G: Quantitative Assessment of Market Impact [Единый Оператор Инфраструктуры 5g: Количественная Оценка Влияния На Рынки]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 4, pages 166-193, August.
    8. Wellmann, Nicolas, 2017. "OTT-messaging and mobile telecommunication: A joint market? - An empirical approach," DICE Discussion Papers 256, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    9. 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.
    10. Hurkens, Sjaak & López, Ángel L., 2012. "The welfare effects of mobile termination rate regulation in asymmetric oligopolies: The case of Spain," Telecommunications Policy, Elsevier, vol. 36(5), pages 369-381.
    11. Moshi, Goodiel Charles & Mwakatumbula, Hilda Jacob, 2017. "Effects of political stability and sector regulations on investments in African mobile markets," Telecommunications Policy, Elsevier, vol. 41(7), pages 651-661.
    12. Wolfgang Briglauer & Anton Schwarz & Christine Zulehner, 2011. "Is fixed-mobile substitution strong enough to de-regulate fixed voice telephony? Evidence from the Austrian markets," Journal of Regulatory Economics, Springer, vol. 39(1), pages 50-67, February.
    13. Gasmi, Farid & Ivaldi, Marc & Recuero Virto, Laura, 2008. "An Empirical Analysis of Cellular Demand in South Africa," IDEI Working Papers 531, Institut d'Économie Industrielle (IDEI), Toulouse.
    14. Mansi Kedia, 2019. "Testing the waterbed effect for India’s telecom industry," Indian Economic Review, Springer, vol. 54(1), pages 121-148, June.
    15. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2012. "How large is the magnitude of fixed-mobile call substitution? Empirical evidence from 16 European countries," DICE Discussion Papers 49, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    16. Moshi, Goodiel & Mitomo, Hitoshi, 2014. "Political stability, regulation and investment in the African mobile markets," 25th European Regional ITS Conference, Brussels 2014 101430, International Telecommunications Society (ITS).
    17. Wellmann, Nicolas, 2017. "OTT-Messaging and Mobile Telecommunication: A Joint Market? An Empirical Approach," 28th European Regional ITS Conference, Passau 2017 169503, International Telecommunications Society (ITS).
    18. Hurkens, Sjaak & López, Ángel L., 2021. "Mobile termination rates and retail regimes in Europe and the US: A unified theory of CPP and RPP," Information Economics and Policy, Elsevier, vol. 56(C).
    19. Latimaha, Rusli & Bahari, Zakaria, 2016. "Elasticity of Demand for Cellular Phone Network Access in Malaysia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 50(2), pages 125-132.
    20. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2014. "What is the magnitude of fixed–mobile call substitution? Empirical evidence from 16 European countries," Telecommunications Policy, Elsevier, vol. 38(8), pages 771-782.
    21. Katona, Klára, 2021. "A vállalati innováció fejlesztésének és elterjedésének hatása a magyar vállalatok teljesítményére [The effect of development and spillover of corporate innovation on the performance of Hungarian co," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(S11), pages 36-51.

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    More about this item

    Keywords

    Mobile telephony; price elasticities; unbalanced panel data; dynamic panel data analysis;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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