Abstract
This chapter continues the discussion of the basic theory of telephone demand and adds a number of extensions to the model derived in Chapter 2.
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The following discussion is taken from Taylor (1975, pp. 76–79). There is now a large literature on the economics and econometrics of non-linear and piece-wise linear budget constraints. Blattenberger (1977) provides the most extensive theoretical treatment. See also Dubin (1985), Moffitt (1986, 1990), and Pudney (1989).
See Wade (1980). Wade’s results, in the context of residential electricity demand, suggest that the problem may not be as severe as I had once thought.
The theorem involved was proven by Gail R. Blattenberger in her Ph.D. dissertation at the University of Michigan (Blattenberger 1977). The theorem is also discussed in Taylor and Blattenberger (1986). See also Chipman (1982).
Cf. Khadem (1976).
See Theil (1959, pp. 328–329).
See Chaddha and Chitgopekar (1971) and the references cited therein. Also in the opening presentation of the Hilton Head conference sponsored by Bell Canada and BELLCORE in April 1990, Jerry Hausman described a study for cellular radio which combined quantal choice methods with logistic diffusion curves.
The parameters α and β can be interpreted as a scale effect and growth rate, respectively. See Chaddha and Chitgopekar (1971, p. 544) for diagrams which depict different values for α. and β.
Cf. also Bergstrom and Chambers (1989) and Taylor and Houthakker (1991).
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© 1994 Springer Science+Business Media Dordrecht
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Taylor, L.D. (1994). The Theory of Telephone Demand. In: Telecommunications Demand in Theory and Practice. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-0892-8_3
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DOI: https://doi.org/10.1007/978-94-011-0892-8_3
Publisher Name: Springer, Dordrecht
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