Scott Savage

• University of Colorado Boulder

We estimate a two-step control-function model that relates incumbent prices for small-business telecommunications services to the number of facilities-based entrants, cost, demand, regulatory conditions, and a correction for endogenous market structure. Results show that the price effects from entry are understated in ordinary least squares regress...

A fundamental policy in European broadband regulation is unbundled access to the local loop of the incumbent telephone company. We present comparative static results that show as the access price decreases, the retail price decreases, the variety of plans offered by Internet service providers increases and the quantity of each variety increases whe...

We use data from restaurants in Shanghai, China to conduct a new empirical analysis of prices and coupons. Our results show a positive relationship between prices and online coupons. Moreover, the price premium from couponing is higher for restaurants about which consumer values appear to be more uncertain. When consumer uncertainty is high, restau...

By allowing carriers to route telephone calls over low-cost private lines, international simple resale (ISR) makes it possible for carriers to provide international telephone service without owning an international circuit. When approved, ISR reduces entry barriers and can increase competition. Using data from US markets from 1995 to 2004, we estim...

Media can be crucial for democracy. Because news and current affairs can promote political awareness and ideological diversity, many societies have charged policy makers with ensuring there are opportunities for different, new and independent viewpoints to be heard (“diversity”), and that media sources respond to the interests of their local commun...

This paper empirically examines the effects of network unbundling on retail prices in U.S. local telephone markets. Panel data for 7,604 wire centers in 43 states from 1996 to 2002 are used to estimate the price effects from the unbundling and entry-promoting conditions of the Telecommunications Act. Results show that Section 271 led to the rebalan...

There are numerous factors that are known to have an impact of the value of residential real estate, including for example the energy efficiency of the building, the proximity of good schools, or the amount of crime in the neighborhood. This paper presents an empirical study of the impact of access to high-speed Internet on real estate values. In o...

There is no data available in the public domain to show how the quality adjusted prices of Internet service in the United States change over time. Moreover, there are no provisions currently in place to collect subscriber-weighted average speed data or regularly publish information on the average price per broadband user. End users, academia, polic...

This study examines the effects of media market structure on consumer demand and welfare. A differentiated-product model is used to estimate demand for the local media environment, described by the offerings from newspapers, radio, television, the Internet and Smartphone. Results show that the representative consumer values more different viewpoint...

As part of the Federal Communications Commission (“FCC”) National Broadband Report to Congress, we have been asked to conduct a survey to help determine consumer valuations of different aspects of broadband Internet service. This report details our methodology, sample and preliminary results. We do not provide policy recommendations.This draft repo...

This paper uses data from a nationwide survey administered during late 2009 and early 2010 to estimate a random utility model of household preferences for broadband Internet service. Reliability and speed are important service characteristics: the representative household is willing to pay $20 per month for more reliable service; $45 for an improve...

The signatories to this document are economists who have studied telecommunications, auctions, and competition policy. While we may disagree about the stimulus package, we believe that it is important to implement mechanisms that make stimulus spending as efficient as possible. To that end, we have come together to encourage the National Telecommun...

This paper examines consumer preferences for Internet bandwidth, focusing on technical ability and urban/rural location as sources of preference heterogeneity. An economic model is outlined that shows that ability decreases the effective price of bandwidth. As a result of this decrease, part of the total effect of an increase in ability will always...

This paper empirically investigates the effect of international simple resale (ISR) authorization on the prices for international message telephone service (IMTS). We compile a firm-level panel data set for over 200 United States-foreign country bilateral markets from 1995 to 2004. These data provide detailed information on prices, variable costs,...

This paper examines how regulators behave in markets when there is a tension between retail competition and cross subsidy. Using retail and wholesale prices from regional Bell operating company territories and price-cost margins as a proxy for political influence, we find that private interests influence the structure of retail prices, especially f...

This study examines the pricing behavior of online retailers (e-tailers) in Chinese e-commerce markets. Descriptive statistics indicate that prices have not converged in China's e-commerce markets and that there is relatively more price variation in markets for cosmetics, compact discs, gifts and books. Fixed effects model estimates show that e-tai...

This study investigates the effect of survey mode on respondent learning and fatigue during repeated choice experiments. Stated preference data are obtained from an experiment concerning high-speed Internet service conducted on samples of mail respondents and online respondents. We identify and estimate aspects of the error components for different...

An important issue in economics is how market structure affects prices. While the standard view is that competition lowers prices, Chen and Riordan (2006) argued that with product differentiation it is not exceptional for prices to be higher under duopoly than monopoly. This paper empirically investigates one implication from Chen and Riordan, name...

Real-time lectures recorded on video and streamed over the Internet are a useful supplement to non-classroom learning. However, because recording confines the instructor to the podium, the classroom experience is diminished when there is less social interaction. This study uses choice experiment data to estimate economics students' willingness to p...

While it is easier to obtain price information online, electronic commerce (e-commerce) may exacerbate information asymmetry about product quality, since the buyer cannot physically inspect the product before purchase. This suggests seller reputation may play a more important role in the online market. As a transition economy, where markets are les...

In this statement, a group of economists assembled by the AEI-Brookings Joint Center makes the following two recommendations to improve the competitive provision of broadband services. First, Congress should eliminate local franchising regulations, which serve as a barrier to new entry. Second, Congress and the Federal Communications Commission sho...

This paper examines how regulators set local prices in response to the changes brought on by the Telecommunications Act of 1996 (“Telecom Act”). We are particularly interested in the extent to which state regulators set prices that promoted efficiency or were influenced by private-interest groups who had secured rents under a regime of regulated mo...

This study examines how lessons produced with an electronic whiteboard, video recorded, and delivered by Internet streaming, affect student satisfaction in undergraduate economics. Survey results show students enjoy the non-classroom experience of streaming and watching lecture videos. However, because video recording confines the instructor to the...

This paper studies how the political influence of consumer groups and firms affects the behavior of state regulators and in turn the effectiveness of federal policies. We employ a unique granular data set for U.S. local telephone markets to examine empirically differences in state and intrastate characteristics that identify regulators' pricing dec...

Data obtained from a nationwide survey of US residences during September and October 2002 are used to investigate household awareness of high-speed Internet access, profile Internet access and use, and gain insight into how important always-on, price, speed, installation, and reliability attributes are in their choice of service. Preliminary analys...

This paper studies how the political influence of consumer groups and firms affects the behavior of state regulators and in turn the effectiveness of federal policies. We employ a unique granular data set for U.S. local telephone markets to examine empirically differences in state and intrastate characteristics that identify regulators’ pricing dec...

Potential competition in the US cable television industry is empirically examined for 385 markets. Predicted entry probabilities are included in a supply-demand model to permit empirical investigation of the effect of potential competition on incumbent cable operator’s price and channel programming decisions. Estimation results show incumbents offe...

United States (US) Department of Commerce data suggests a necessary precursor to the success of electronic commerce (e-commerce) is active engagement in Internet activities by the population at large. However, without empirical assessment it is difficult to determine the relative importance of the drivers of Internet access, and ultimately e-commer...

This study uses survey data from 2003 to empirically assess United States residential demand for Internet access. Econometric results indicate that service reliability, speed, and the ability to share music and video files are highly valued Internet access attributes. The latter finding suggests commercial development of online file sharing service...

This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...

An econometric model is used to examine market power in US international telephone markets. Lerner index estimates suggest AT&T's collection rate-cost margin was between 12% and 24% during 1991 to 1995. Although Lerner estimates imply deadweight welfare losses of up to US $261 million per annum, such losses are small compared to those from the inef...

In this paper we develop a model for estimating the direct and indirect effects of telecommunications investment on economic growth, and use the model to assess the effects of telecommunications liberalization (i.e., privatization and competition) on the economy. Using a panel of 46 countries from 1984 to 1999, we find a positive effect of telecom...

This study estimates a nested multinomial logit (NMNL) model of broadband delivered entertainment service subscription that allows for the impact of an installation fee and rental price, service attributes and household demographic variables on subscription. The model is estimated on stated-preference data obtained from an Australia-wide survey of...

This study compares forecasts of US international message telephone service (IMTS) traffic using several relative mean squared error statistics. The forecasts are obtained from time-series extrapolation, univariate autoregressive integrated moving average (ARIMA), error correction and vector autoregressive models. The models are estimated on annual...

Recent technology change and market liberalization have substantially reduced the costs of providing international message telephone services (IMTS). However, the full extent of these cost reductions have generally not been reflected in lower prices. This paper reviews the recent literature on international telecommunications markets, and examines...

Previous studies have demonstrated an empirical relationship between accumulated R&D expenditures and total factor productivity (TFP), and have shown that the benefits of R&D can spill across countries through trade. This paper extends these analyses to a sample of 15 OECD countries and six Asian countries, Chinese Taipei, India, Indonesia, Korea,...

This study provides a contemporary understanding of demand relations in European Union (EU) international message telephone service (IMTS) markets prior to full liberalization at January 1 1998. Point-to-point demand equations that relate IMTS demand to prices, income, population and distance are estimated on bilateral market data for ten EU countr...

This paper employs a composite cost function toexamine the cost structure of Australian telephoneservices. The composite cost model combines thelog-quadratic input price structure of the translogmodel with a quadratic structure for multiple outputs. Quadratic output structures permit the measurement ofeconomies of scale, economies of scope, andsuba...

This study examines sources of telecommunications sector productivity growth. Total factor productivity (TFP) growth is calculated using the Malmquist productivity index for a sample of 74 countries for the period 1991 through 1995. An econometric model is estimated which relates TFP growth to output growth, network digitisation, telecommunications...

Recent technology change and market liberalization have substantially reduced the costs of providing international message telephone services (IMTS). However, the full extent of these cost reductions have generally not been reflected in lower prices. This paper reviews the recent literature on international telecommunications markets, and examines...

This paper examines the role research and development (R&D) plays in technology progress for a sample of OECD and Asian economies from 1980 to 1995. An empirical model is estimated which relates total factor productivity to domestic and foreign R&D activity, trade, and information technology and telecommunications (ITT). Model estimates confirm a p...

In an emerging global economy the ability of the telecommunications sector to provide an internationally competitive network for transferring information has significant implications for trade and economic growth. Because of recent large world-wide investments in telecommunications infrastructure, quantifying the impact of telecommunications in eco...

Network economics suggests that Internet growth may be explained by an externality. This study empirically tests for the presence of such an externality, and analyses a cross-section of Internet subscribers to identify adopter characteristics, and applications fuelling early subscription. The results confirm that the establishment of a secure base...

Recent moves toward contestable universal service markets for rural areas raises issues of measuring the net cost of service provision. Measurement of net cost requires estimates of latent demand for advanced communications. This paper seeks for the first time to provide quantitative estimates of the magnitude of latent income pools available to ca...

An econometric model is estimated to identify determinants of trade imbalance in international message telephone services markets. Results indicate that asymmetric market structure is important in explaining bilateral market imbalances for high income country pairs. For low and high income country pairs, GDP per capita is the dominant cause of traf...

This study constructs a profile of the representative Australian residential Internet user from data obtained from a web-based survey. Survey data indicate the representative user is male, 20 to 40 years of age, highly educated, uses the Internet 8 hrs per week for e-mail and FTP, and has a monthly bill of AUD32. Anordered-logit model relates Inter...

Several national governments argue international telephone prices are high because of asymmetric competition and inefficiencies in the accounting arrangements that govern the telecommunications services trade. This paper develops a model of U.S. international telephone pricing that allows for the accounting rate system and contains market-structure...

Stabilising Asia-Pacific exchange rates by establishing a system of pegs, bands or target zones around the Japanese yen requires the compromise of domestic policy autonomy. The cost of doing so is least when members' reaction to economic shocks are symmetric. This study considers which currencies meet this necessary precondition. To assess regional...

This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...

Traditional models of international trade flows find that prices explain significant growth in export market shares. In the new international trade theory non-price factors are seen to be of great importance for the explanation of trade. Following Magnier and Toujas-Bernate (1994), this study introduces non-price factors, namely gross fixed investm...

Rapid growth in Internet use, combined with easy market entry by Internet service providers (ISPs), has resulted in a highly competitive supply of Internet services. Australian ISPs range in size from a few large national operators to niche ISPs focused on specialised service. With many ISPs currently not profitable, subscriber retention is an impo...

Access to information is essential for efficient business operation and social empowerment. Many Asia-Pacific businesses are exposed to international markets while their corresponding information requirements are not well met. Restricted information technology and telecommunications access also diminishes the ability of remote regions to generate r...

Several national governments have expressed concern at the inability of carriers to negotiate lower accounting rates. Ergas and Patterson (1991) and Frieden (1997) argue that it is only on bilateral markets with facilities-based competition at both ends that conditions favour accounting rates reductions. In the absence of facilities-based competiti...

The antiquated state of the telecommunications network in the transitional economies of Central and Eastern Europe has been identified by the OECD (1993) and the ITU (1994) as a significant impediment to regional productivity, international competitiveness and trade performance. This situation suggests that the upgrading and extension of the teleco...

This study examines sources of Australian labour productivity change from 1950 to 1994. Time-series data are used to estimate a model capturing the interaction between labour productivity, fixed capital, human capital, telecommunications, trade openness and international competitiveness. Attention is given to the timeseries properties of these data...

Several national governments have expressed concern at the inability of carriers to negotiate lower accounting rates. Ergas and Patterson (1991) and Frieden (1997) argue that it is only on bilateral markets with facilities-based competition at both ends that conditions favour accounting rates reductions. In the absence of facilities-based competiti...

The 1987 Green Paper on Australian higher education included a recommendation for the abandonment of the binary system. The Dawkins plan effectively transferred resources from established universities to the former colleges of advanced education. This study compares the initial and subsequent performance of economics departments. The analysis appli...

Access to information is essential for efficient business operation. While many regional businesses are exposed to international markets their corresponding information requirements are not well met. Barriers to information and communications technology (ITT) access also restricts the ability of regional populations to generate income streams throu...

This article studies household interest in subscribing to education and information services over a broadband network in Australian provincial centers using stated-preference data and a variety of demographic data. We find that although a majority of respondents are interested in subscribing, the number drops considerably when price information is...

There has been considerable debate in Australia concerning the social and economies effects of telecommunications carrier investment in broadband network infrastructure. Whether particular groups within networked communities are unable or unwilling to subscribe to broadband services is an important policy issue. This paper sets oat to identify metr...

Notwithstanding the inconclusive status of the public policy debate on intervention in support of broadband Internet access, wireless broadband can play an important role in the overall adoption of broadband in the U. S. Results from a recent consumer survey of broadband demand attributes informs here a discussion of wireless broadband, including t...

Entry and potential competition in the US cable TV industry is empirically examined for about 400 markets. Logit estimates indicate new wireline overbuild and LEC entrants are more likely to enter monopoly markets with high population density, income, and household growth. Entry is less likely in regulated city markets, and markets served by an inc...