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.
KeywordsNickel Income Expense Toll
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