Skip to main content

Estimating the Demand for Voice over IP Services: A Contingent Valuation Approach

  • Chapter
Governance of Communication Networks

Part of the book series: Contributions to Economics ((CE))

Abstract

The demand for Voice-over-IP (VoIP) services is receiving increasing attention as an alternative to traditional switched access based telephone services. This paper focuses on the underlying determinants of demand to assess the potential for VoIP. The authors utilise a model of demand based on a consumer’s willingness to pay and provide estimates of the elasticity of demand for VoIP. The intent of the paper is to add to the discussion of VoIP and to stimulate analysis.

This paper is adapted and updated from an earlier version published in Telektronikk. The authors thank Dale Kulp, president of Marketing Systems Group for access to the CENTRIS omnibus survey.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 84.99
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Alleman J (1976) The Demand for Local Telephone Service. US Department of Commerce, Office of Telecommunications, OT Report, pp 76–24.

    Google Scholar 

  • Alleman J (1977) The Pricing of Local Telephone Service. US Department of Commerce, Office of Telecommunications, OT Special Report, 77-14, pp i–iv, 1–183.

    Google Scholar 

  • Andersson K, Myrvold O (2002) Residential Demand for ‘Multipurpose Broadband Access’: Evidence from a Norwegian VDSL Trial. Telektronic 2,96:20–25

    Google Scholar 

  • Andersson K, Fjell K, Foros O (2003) Are TV-viewers and surfers different breeds? Broadband demand and asymmetric cross-price effects. Paper presented at the Norwegian Annual Conference in Economics, Bergen, Telenor R&D, 1331 Fornebu, Norway

    Google Scholar 

  • Bodnar J, Dilworth P, Iacono S (1988) Cross-Section Analysis of Residential Telephone Subscription in Canada. Information Economics and Policy 4,3:311–331

    Google Scholar 

  • Cramer JS (1969) Empirical Econometrics. Elsevier Publishing Co., New York

    Google Scholar 

  • Diamond PA, Hausman JA (1994) Contingent Valuation: Is Some Number Better Than No Number? Journal of Economic Perspectives 4,8, fall:45–64

    Google Scholar 

  • Erikson RC, Kaserman DL, Mayo JW (1998) Targeted and Untargeted Subsidy Schemes: Evidence from Post-Divestiture Efforts to Promote Universal Service. Journal of Law and Economics, 41, October:477–502

    Google Scholar 

  • Goldman Sachs Telecom Services (2004) Wireline/Broadband Competitive Analysis, April 16

    Google Scholar 

  • Hammitt JK (1986) Estimating Consumer Willingness to Pay to Reduce Food Borne Risk. Report R-3447-EPA, The RAND Corporation

    Google Scholar 

  • Hannemann WM (1994) Valuing the Environment though Contingent Valuation. Journal of Economic Perspectives 4,8, fall:19–44

    Google Scholar 

  • Hausman JA, Sidak JG, Singer HJ (2001) Cable Modems and DSL: Broadband internet Access for Residential Customers. American Economic Review Papers and Proceedings 2,91, May:302–307

    Google Scholar 

  • Hausman JA, Tardiff TJ, Bellinfonte A (1993) The Effects of the Breakup of AT&T on Telephone Penetration in the United States. American Economic Review Papers 2,83, May:178–184

    Google Scholar 

  • Ker AP, Goodwin BK (2000) Nonparametric Estimation of Crop Insurance and Rates Revisited. American Journal of Agricultural Economics, 83, May:463–478

    Google Scholar 

  • Kridel DJ (1988) A Consumer Surplus Approach to Predicting Extended Area Service (EAS) Development and Stimulation Rates. Information Economics and Policy 43:379–390

    Article  Google Scholar 

  • Kridel DJ, Rappoport PN, Taylor LD (2001) An Econometric Model of the Demand for Access to the internet by Cable Modem. In: Loomis DG, Taylor LD (eds) Forecasting the internet: Understanding the Explosive Growth of Data Communications. Kluwer Academic Publishers

    Google Scholar 

  • National Oceanographic and Atmospheric Administration (NOAA) (1993) Federal Register, 4601,58, January 15

    Google Scholar 

  • Maddala GS (1969) Limited —Dependent and Qualitative Variables in Econometrics. Cambridge University Press

    Google Scholar 

  • McFadden D (1994) Contingent Valuation and Social Choice. American Journal of Agricultural Economics, 76, November:695–707

    Google Scholar 

  • Perl LJ (1978) Economic and Demographic Determinants for Basic Telephone Service. National Economic Research Associates, White Plains, New York, March 28

    Google Scholar 

  • Perl LJ (1983) Residential Demand for Telephone Service 1983. Prepared for the Central Service Organization of the Bell Operating Companies, Inc., National Economic Research Associates, White Plains, New York, December

    Google Scholar 

  • Portnoy PR (1994) The Contingent Valuation Debate: Why Economists Should Care. Journal of Economic Perspectives 4,8, fall:3–18

    Google Scholar 

  • Rappoport PN, Taylor LD, Kridel DJ, Serad W (1998) The Demand for internet and On-Line Access. In: Bohlin E, Levin SL (eds) Telecommunications Transformation: Technology, Strategy and Policy, IOS Press

    Google Scholar 

  • Rappoport PN, Taylor LD, Kridel DJ (1999) An Econometric Study of The Demand for Access to The internet. In: Loomis DG, Taylor LD (eds) The Future of The Telecommunications Industry: Forecasting and Demand Analysis, Kluwer Academic Publishers, Dordrecht

    Google Scholar 

  • Rappoport PN, Taylor LD, Kridel DJ (2002a) The Demand for High-Speed Access to the internet. In: Loomis DG, Taylor LD (eds) Forecasting The internet: Understanding the Explosive Growth of Data Communications, Kluwer Academic Publishers, Dordrecht

    Google Scholar 

  • Rappoport PN, Taylor LD, Kridel DJ (2002b) The Demand for Broadband: Access, Content, and The Value of Time. In: Crandall RW, Alleman JH (eds) Broadband: Should We Regulate High-Speed internet Access. AEI-Brookings Joint Center for Regulatory Studies, Washington, D.C.

    Google Scholar 

  • Rappoport PN, Kridel DJ, Taylor LD, Duffy-Deno K, Alleman J (2003a) Forecasting The Demand for internet Services. In: Madden G (ed) The International Handbook of Telecommunications Economics: Volume II, Edward Elgar Publishing Co., London

    Google Scholar 

  • Rappoport PN, Taylor LD, Kridel DJ (2003b) Willingness-to-Pay and the Demand for Broadband Access. In: Shampine A (ed) Down to the Wire: Studies in the Diffusion and Regulation of Telecommunications Technologies, Nova Science Publishers

    Google Scholar 

  • Rappoport PN, Kridel DJ, Taylor LD, Alleman J (2004) The Demand for Voice over IP: An Econometric Analysis Using Survey Data on Willingness-to-Pay. Telektronikk 4.04, December, pp 70–83

    Google Scholar 

  • Silverman BW (1986) Density Estimation for Statistics and Data Analysis. Monographs on Statistics and Applied Probability 26, Chapman and Hall, London

    MATH  Google Scholar 

  • Smith VK (1993) Non-Market Valuation of Natural Resources: An Interpretive Appraisal. Land Economics 1,69, February:1–26

    Article  CAS  Google Scholar 

  • Taylor LD (1994) Telecommunications Demand in Theory and Practice. Kluwer Academic Publishers, Dordrecht

    Google Scholar 

  • Taylor LD, Kridel DJ (1990) Residential Demand for Access to the Telephone Network. In: de Fontenay A, Shugard MH, Sibley DS, Telecommunications Demand Modeling, North Holland Publishing Co., Amsterdam

    Google Scholar 

  • Train KE, McFadden DL, Ben-Akiva M (1987) The Demand for Local Telephone Service: A Fully Discrete Model of Residential Calling Patterns and Service Choices. The Rand Journal of Economics 1,18, Spring:109–123

    Article  Google Scholar 

  • Varian HR (2002) Demand for Bandwidth: Evidence from the INDEX Project. In: Crandall RW, JH Alleman Broadband: Should We Regulate High-Speed internet Access. AEI-Brookings Joint Center for Regulatory Studies, Washington, D.C

    Google Scholar 

  • Wand MP, Jones MC (1995) Kernal Smoothing. Monographs on Statistics and Applied Probability 60, Chapman and Hall, London

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2006 Physica-Verlag Heidelberg

About this chapter

Cite this chapter

Rappoport, P., Taylor, L.D., Alleman, J. (2006). Estimating the Demand for Voice over IP Services: A Contingent Valuation Approach. In: Preissl, B., Müller, J. (eds) Governance of Communication Networks. Contributions to Economics. Physica-Verlag HD. https://doi.org/10.1007/3-7908-1746-5_13

Download citation

Publish with us

Policies and ethics