Local measured service revisited: A Southern Wisconsin test case
Pricing local telephone service on a usage-sensitive basis has long been thought to have welfare-enhancing effects over the traditional flat-rate pricing scheme. The authors examine a new data set containing observations of residential and business calling patterns both before and after a switch to measured service. For a rural area of south-central Wisconsin, the data provide a rare opportunity to study the same consumers both before and after such a pricing change is made. Comparing the measured system used in this area to the previous literature shows that, even though the current system does not contain all the elements of a theoretically optimal pricing scheme, significant welfare gains are still achieved. Copyright International Atlantic Economic Society 1998
Volume (Year): 26 (1998)
Issue (Month): 2 (June)
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