Fixed-Mobile Telephone Subscription Substitution in the U.S

Michael Ward () and Glenn Woroch ()

Working Papers from University of Texas at Arlington, Department of Economics

Abstract: We empirically estimate the substitutability of fixed and mobile services for telecommunications access using a large, U.S. household survey1 conducted over the period 1999-2001. We take advantage of telephone price subsidy programs for low-income households to identify large, exogenous changes in fixed service prices to find substantial demand substitutability between fixed and mobile subscription. Since income and demographic factors account for the subsidy’s effect on subscription to cable TV and Internet services and purchase of a personal computer, we infer that the residual effect of the subsidy on mobile subscription represents a price, and not an income, effect.

Keywords: Telecommunications; Mobile; Substitution; Lifeline (search for similar items in EconPapers)
JEL-codes: D12 L0 L96 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2005-03
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