Semi-Parametric Estimates of Intra-Lata Demand Elasticities
In most states, including recently in California and Hawaii, state public utility commissions (PUCs) have moved towards competition in the market for intra-LATA toll services1. Since the rates charged by the local exchange carriers (LECs) for toll services in these states were substantially above cost, deregulation has meant a substantial drop in intra-LATA toll rates. The PUCs in these states have allowed the LECs to recover revenue lost from lower rates in the toll market by raising local tariffs.
KeywordsTelecommunication Industry Demand Analysis Total Minute Truncation Bias Local Exchange Carrier
Unable to display preview. Download preview PDF.
- A. N. Doherty, “Empirical Estimates of Demand and Cost Elasticities of Local Telephone Service”, in Changing Paterns in Regulated Markets and Technology: The Effects of Public Utility Pricing, pages 115–141, Institute of Public Utilities, Michigan State University 1984.Google Scholar
- J. A. Hausman, “Phase III IRD testimony” California Public Utilities Commission 1992.Google Scholar
- A. Levy, “Demand for Intra-LATA Telecommunication:Evidence and Policy Implications” Working paper, Department of Economics, North Carolina State University Raleigh, NC 1998a.Google Scholar
- A. Levy, “A Generalized Additive Model of Telecommunications Demand” Working paper, Department of Economics, North Carolina State University Raleigh, NC 1998b.Google Scholar
- M. Porter, “California Toll Elasticities” presented at the 1998 ICFC Conference, St. Louis, MO 1998.Google Scholar
- L. D. Taylor and P. N. Rappaport, “Intralata Toll Demand Models estimated with Data from the NTDS Data Base” in Proceedings from the 1993 National Telecommunications Forecasting Conference June 1993.Google Scholar
- K. E. Train, “Intra-lata Toll Elasticities” Telecommunications Policy December 1993.Google Scholar
- H. Vanan, Microeconomic Analysis, Norton, Third Edition, 1992.Google Scholar
- J. D. Zona and B. Jacob, “The Total Bill Concept: Defining and Testing Alternative Views” in Telecommunications Demand Modeling with Dynamic Regulation Bellcore and Bell Canada Industry Forum, April 1990.Google Scholar