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An Estimation of UK Telephone Access Demand Using Pseudo-Panel Data

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  • Katharina GASSNER

Abstract

The policy of rebalancing tariffs in the newly liberalised telecommunications market has given rise to concerns about universal service issues. The rise of connection and rental charges threatens to increase the number of disconnections and burden low-income groups in a disproportionate manner. In order to assess the validity of these fears, we estimate a telephone access demand model based on UK houshold data. We use a pseudo-panel technique to account for the repeated cross-section nature of the data. Our reseulats of small, but significant price elasticities with respect to connection charges, line rental, and household income are consistent with evidence from North America. Furthermore, we find a significant differential in the elasticity measured between high- and low-income groups.

Suggested Citation

  • Katharina GASSNER, 1998. "An Estimation of UK Telephone Access Demand Using Pseudo-Panel Data," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 9817, Université de Lausanne, Faculté des HEC, DEEP.
  • Handle: RePEc:lau:crdeep:9817
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    References listed on IDEAS

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    1. Kridel, Donald J & Taylor, Lester D, 1993. "The Demand for Commodity Packages: The Case of Telephone Custom Calling Features," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 362-368, May.
    2. Moffitt, Robert, 1993. "Identification and estimation of dynamic models with a time series of repeated cross-sections," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 99-123, September.
    3. Verbeek, Marno & Nijman, Theo, 1992. "Can Cohort Data Be Treated as Genuine Panel Data?," Empirical Economics, Springer, vol. 17(1), pages 9-23.
    4. Cain, Paul & Macdonald, James M, 1991. "Telephone Pricing Structures: The Effects on Universal Service," Journal of Regulatory Economics, Springer, vol. 3(4), pages 293-308, December.
    5. Cracknell, David & Knott, Michael, 1995. "The measurement of price elasticities--the BT experience," International Journal of Forecasting, Elsevier, vol. 11(2), pages 321-329, June.
    6. Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
    7. B.E. Davis & G.J. Caccappolo & M.A. Chaudry, 1973. "An Econometric Planning Model for American Telephone and Telegraph Company," Bell Journal of Economics, The RAND Corporation, vol. 4(1), pages 29-56, Spring.
    8. Browning, Martin & Deaton, Angus & Irish, Margaret, 1985. "A Profitable Approach to Labor Supply and Commodity Demands over the Life-Cycle," Econometrica, Econometric Society, vol. 53(3), pages 503-543, May.
    9. Train, Kenneth E, 1994. "Self-Selecting Tariffs under Pure Preferences among Tariffs," Journal of Regulatory Economics, Springer, vol. 6(3), pages 247-264, September.
    10. Train, Kenneth E & Ben-Akiva, Moshe & Atherton, Terry, 1989. "Consumption Patterns and Self-selecting Tariffs," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 62-73, February.
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    Cited by:

    1. Melanie K. Jones, 2009. "The Employment Effect of the Disability Discrimination Act: Evidence from the Health Survey for England," LABOUR, CEIS, vol. 23(2), pages 349-369, June.
    2. Balmer, Roberto E., 2015. "Competition and market strategies in the Swiss fixed telephony market," 26th European Regional ITS Conference, Madrid 2015 127123, International Telecommunications Society (ITS).
    3. Balmer, Roberto E., 2014. "Competition and market strategies in the Swiss fixed telephony market," 20th ITS Biennial Conference, Rio de Janeiro 2014: The Net and the Internet - Emerging Markets and Policies 106837, International Telecommunications Society (ITS).
    4. Balmer, Roberto, 2013. "Competition and Market Strategies in the Swiss Fixed Telephony Market. An estimation of Swisscom’s dynamic residual demand curve," MPRA Paper 54078, University Library of Munich, Germany.

    More about this item

    Keywords

    universal service; telephone access; pseudo-panel data;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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