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Fixed-Mobile Telephone Subscription Substitution in the U.S

Author

Listed:
  • Michael R. Ward

    (Department of Economics, University of Texas at Arlington)

  • Glenn A. Woroch

    (University of California at Berkeley)

Abstract

We empirically estimate the substitutability of fixed and mobile services for telecommunications access using a large, U.S. household survey1 conducted over the period 1999-2001. We take advantage of telephone price subsidy programs for low-income households to identify large, exogenous changes in fixed service prices to find substantial demand substitutability between fixed and mobile subscription. Since income and demographic factors account for the subsidy’s effect on subscription to cable TV and Internet services and purchase of a personal computer, we infer that the residual effect of the subsidy on mobile subscription represents a price, and not an income, effect.

Suggested Citation

  • Michael R. Ward & Glenn A. Woroch, 2005. "Fixed-Mobile Telephone Subscription Substitution in the U.S," Working Papers 0501, University of Texas at Arlington, Department of Economics.
    • Handle: RePEc:txa:wpaper:0501
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    File URL: http://www.uta.edu/faculty/mikeward/MFS3.pdf
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    More about this item

    Keywords

    Telecommunications; Mobile; Substitution; Lifeline;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • L0 - Industrial Organization - - General

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