Charging for Local Telephone Calls
Price Elasticity Estimates from the GTE Illinois Experiment
Price elasticities are estimated for local telephone calls and minutes of conversation using data from a pricing experiment in central Illinois conducted by General Telephone and Electronics. The experiment charges separately for calls and for minutes. Using a model that is consistent with the theory of telephone demand, the authors estimate the effects of both prices. The nonlinear generalized least squares estimates of the elasticities are fairly small--about 0.1 or less in absolute value at experimental price levels--but they are estimated with high precision. The report briefly considers the application of these results to predict the effects of introducing measured service telephone rates in other cities.
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- Copyright: RAND Corporation
- Availability: Available
- Format: Paperback
- Pages: 94
- List Price: $30.00
- Price: $24.00
- Document Number: R-2635-NSF
- Year: 1982
- Series: Reports
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