Understanding European Union international message telephone services demand
This study provides a contemporary understanding of demand relations in European Union (EU) international message telephone service (IMTS) markets prior to full liberalization at January 1 1998. Point-to-point demand equations that relate IMTS demand to prices, income, population and distance are estimated on bilateral market data for ten EU countries from 1990 to 1995. Model estimates suggest price elasticities of outgoing and incoming demand between 20.175 and 20.456, and 20.215 and 20.674, respectively. These elasticity estimates provide an empirical base from which to calculate welfare gains from the full deregulation of EU IMTS markets after 1998.
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