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Relationships Between the Demand for Local Telephone Calls and Household Characteristics
Abstract
The demand for local telephone calls varies among households. This paper develops models, based on limited data from California and Cincinnati, which predict the demand for local calls from household characteristics. The models enable one to stratify a metropolitan area into regions of expected high, low, and medium telephone demand and thus provide a mechanism for efficiently estimating the demand in a metropolitan area from the demand of a sample of telephone customers in the area. Although the data and models are too limited to establish definite causal relationships, the models suggest that the demand for local calls might be related to the number of people in the household and the age and sex of the household head. Furthermore, while there is some ambiguity between the California and Cincinnati results, there is also the suggestion that local call demand might be related to income, the race of the household head, and the telephone density in the wire center.
... Additional studies have been published since then, all designed to assess the effects of usage sensitive pricing on different population groups. Infosino (1980), using a sample of 1000 households spread over 18 WCs in Metropolitan Los Angeles and Cincinnati, and the results of a mail survey, relates individual household calling rates to such variables as race, sex of head of household, and size and income of household. He obtains R 2 around 0.35. ...
... Les résultats qui seront présentés ne seront donc représentatifs que des seules pratiques téléphoniques domestiques des citadins. Il est néanmoins comparable aux échantillons enquêtes à Chicago et à Cincinnati (Brandon, 1981 ;Infosino, 1980). L'échantillon enquêté, bien que représentatif de la population urbaine abonnée, est relativement petit. ...
A l'heure du developpement des nouvelles technologies et services de telecommunications grand public, s' interesser au telephone plus que centenaire pourrait paraitre relever de l archaisme, de l'histoire ou du tourisme intellectuel. Et pourtant, nous connaissons finalement peu de choses de l'usage domestique du telephone. Qui telephone ? Avec quels correspondants ? Pour quels motifs ? Par dela la diversite des communications, est-il possible d'identifier des pratiques telephoniques differenciees ? Telles sont les principales questions auxquelles cette contribution s'efforce de repondre, sur la base de l'analyse des resultats d'une enquete quantitative. Les effets de la sociabilite et des reseaux de relations sur la consommation et les usages sont egalement analyses. Au-dela, l'etude des pratiques telephoniques, objet de cette recherche, se revele etre un excellent outil, tout a la fois heuristique et deformant, pour l'analyse des societes contemporaines.
... Additional studies have been published since then, all designed to assess the effects of usage sensitive pricing on different population groups. Infosino (1980), using a sample of 1000 households spread over 18 WCs in Metropolitan Los Angeles and Cincinnati, and the results of a mail survey, relates individual household calling rates to such variables as race, sex of head of household, and size and income of household. He obtains R 2 around 0.35. ...
Telecommunication systems carry information over space, in the same way as transportation systems carry goods and people. In both cases, these movements are necessary to complete economic and social transactions, and can be viewed as derived demands. Telecommunication flows analysis may therefore provide empirical insights into the patterns of spatial interactions between individuals, businesses, cities, regions, and countries. Various modeling techniques have been used, with real-world data and at various geographical scales, by economists, geographers, and other social scientists to better understand these patterns. The purpose of this paper is to critically review the literature dealing with telecommunication flows, focusing on both modeling techniques and empirical applications and results. This review is organized along different geographical scales: local, regional, and international.
... See, for example,Infosino ( 1980). In contrast to our model, which relies upon per capita measures of income, models that rely on total income within the market area tend to generate significant parameters associated with the income variable. ...
Although telephone pricing has received increasing attention in recent years, the geographic patterns of telephone pricing and the corresponding economic consequences of those patterns have remained perplexing to consumers and policymakers and largely unaddressed by economists. In this article we first specify a model of the demand for short (intraLATA) long distance calling. We then draw upon data made available by the recent adoption of extended area service (EAS) in four metropolitan areas to empirically measure the structure of inter-exchange telephone demand. Given these estimates, and a conceptual framework for analyzing the economic welfare effects, we were able to quantify the consumer-surplus effects of alternative pricing policies. The empirical results indicate that consumer surplus is noticeably enhanced by adopting EAS. But the net economic welfare effects are shown to be sensitive to, among other things, the level of price-cost margins prevailing prior to the implementation of EAS.
... The household explanatory variables, x, are based on the measures of social disadvantage discussed in Section 2 and previous studies of telecommunications network access (Perl, 1978(Perl, , 1983Infosino, 1980;Brandon, 1981;Alleman et al., 1983;Bodnar et al., 1988;Taylor and Kridel, 1990). The list of explanatory variables developed for inclusion in the econometric model are listed in Table 1. ...
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 metropolitan households that are less likely to subscribe to services and examines whether there exists a systematic link between subscription interest and measures of social disadvantage Analysis of stated-preference subscription intentions data, obtained from an Australia-wide survey of 715 households, shows that there is potential for the news communication technology to create information inequality. Copyright 1996 by Oxford University Press.
... Variables developed here are based on the notions of social disadvantage considered above and previous studies of network access (in particular Infosino, 1980;Brandon, 1981;Perl, 1983;Bodnar et al., 1988;Taylor and Kridel, 1990). The list of variables developed for inclusion in the econometric model are listed below in Table 9. ...
The broadband plans deployed by governments have not benefited so far from substantive theoretical or empirical economic insights on the relative effectiveness of alternative combinations of policy interventions (on which more will be said in the next section). This paper make a first attempt at filling this gap by exploring whether some (set of) policy tools has so far proven to be more effective than others. We collected detailed data on the policies adopted by 21 OECD countries and perform a cross-country analysis. Our evidence suggests the relevance of the institutional environment form one side and the importance of demand-side interventions from the other. Interventions on the supply side appear to be less effective on broadband diffusion than those on the demand side
When the billing of local telephone service is changed from flat rate to measured service, the distribution of monthly calling rates is altered. This paper models the distribution of flat-rate telephone use in terms of demographic variables and stochastic components; the shift to measured service affects both the systematic and stochastic parameters. The model is fitted by maximum likelihood to data for interviewed households participating in General Telephone's local-measured-service experiment in Illinois. Households tend to make more calls if they are larger (more people), older, or include teenagers. They tend to reduce calling proportionately more in response to usage charges if they average many calls under flat rate for any of the above reasons or for other, unexplained reasons. There is substantial variation in telephone use by households with similar demographic characteristics. Consequently, the benefits and costs of local measured service will tend to be diffused across demographic groups.
The coupon issued by Korail (Korail's coupon) is characterized by the properties such as a discount rate, an issuing region, a selling region, and a practically discounted rate. The purpose of this study is to investigate their impacts on the redemption time using Log-Normal distribution, and to derive managerial implications for improving Korail's discount program. The result showed that the redemption time was shorter or longer depending a discount rate, an issuing region, a selling region, and a practically discounted rate.
We present an empirical model of households' choices among local telephone service options (for example, between flat-rate and measured service) and the interrelation of these choices with the number and average duration of local calls households make at each time of day to each geographical zone. Using a nested logit model with estimation performed on a randomly selected subset of the households' calling patterns, we calculate elasticities of demand for each local service option, number of calls, average duration, and revenues with respect to the fixed monthly charges and the usage charges for calling under each option. We find moderate price elasticities of number of calls with respect to usage charges for households subscribing to measured service. Nevertheless, raising usage charges has a negligible effect on revenues, since a sufficient number of households either originally subscribe to flat-rate service or convert to flat-rate service in response to higher usage charges. We find a high elasticity of demand for each service option with respect to its fixed monthly fee. This indicates high substitutability among service options. The shift among service options induces new calling patterns, which we find to be a small but not negligible indirect effect.
The broadband plans deployed by governments have not benefited so far from substantive theoretical or empirical economic insights on the relative effectiveness of alternative combinations of policy interventions (on which more will be said in the next section). This paper make a first attempt at filling this gap by exploring whether some (set of) policy tools has so far proven to be more effective than others. We collected detailed data on the policies adopted by 21 OECD countries and perform a cross-country analysis. Our evidence suggests the relevance of the institutional environment form one side and the importance of demand-side interventions from the other. Interventions on the supply side appear to be less effective on broadband diffusion than those on the demand side