Journal Article

The Demand for International Message Telephone Services: A Two-Stage Budgeting Model

JINGSONG CUI
Review of Industrial Organization
Vol. 27, No. 2 (September 2005), pp. 167-183
Published by: Springer
Stable URL: https://www.jstor.org/stable/41803630
Page Count: 17
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The Demand for International Message Telephone Services: A Two-Stage Budgeting Model
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Abstract

This paper examines demand for international telephone services. Using panel data covering 57 routes over 6 years, a model featuring a two-stage budgeting process and product differentiation is implemented for empirical estimation. A range of economic, social, cultural and technological variables are included in the aggregate-level model to study overall demand. The unique and rich data offers an opportunity to examine the impact of new technology innovations such as Internet on traditional telephone services. The company-level model incorporates product differentiation and uses the Almost Ideal Demand System to simultaneously estimate demands for and competition between carriers.

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