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ESTIMATION OF THE DEMAND ELASTICITIES FOR MOBILE TELECOMMUNICATION IN OECD COUNTRIES

Year 2019, Volume: 15 Issue: 4, 991 - 1009, 01.12.2019
https://doi.org/10.17130/ijmeb.2019456394

Abstract

The demand structure in mobile telecommunications markets provides important information about market behavior for policy makers and operators. The main purpose of this study is to examine the demand structure in mobile telecommunication markets with the example of OECD countries and to demonstrate the long-term demand elasticities. In this context, long-term demand elasticities are estimated with the help of the AMG estimator, which allows for heterogeneity, using quarterly panel data for the period of 2005-2015 of 22 OECD countries. According to the results of the estimation in the long-term for the country group, the price elasticity of demand is -0.53 and the income elasticity of the demand is 0.36. Other results show that demand elasticities vary considerably between countries, depending on the countryspecific characteristics

References

  • Afridi, S.A., Farooq, S.U., Ullah, M.I., & Rahmani, R. (2010). The analysis of cellular services and estimating fixed to mobile price elasticities: A case study of United Kingdom. European Journal of Scientific Research, 40(3), 428-440.
  • Ahn, H., & Lee, M.H. (1999). An econometric analysis of the demand for access to mobile telephone networks. Information Economics and Policy, 11, 297-305.
  • Banerjee, A., & Ros, A.J. (2004). Drivers of demand growth for mobile telecommunications services: Evidence from international panel data. National Economic Research Associates, Cambridge.
  • Breusch, T. S., & Pagan, A. R. (1980). The lagrange multiplier test and its applications to model specification in econometrics. The Review of Economic Studies, 47(1), 239-253.
  • Danaher, P. (2002). Optimal pricing of new subscription services: Analysis of a market experiment. Marketing Science, 21(2), 119-138.
  • Dewenter, R., & J. Haucap (December, 2004). Demand elasticities for mobile telecommunications in Austria. University of the Federal Armed Forces Hamburg Discussion Paper, 33.
  • Eberhart M., & Bond, S.R. (2009). Cross-sectional dependence in non-stationary panel models: A novel estimator. Nordic Econometric Meetings, Sweeden.
  • Eberhart, M., & Teal F. (2010). Productivity analysis in the global manufacturing production. Department of Economics, University of Oxford.
  • Garbacz, C., & Thompson, H.G. (2007). Demand for telecommunication services in developing countries. Telecommunications Policy, 31, 276-289.
  • Growitsch, C., Marcus, J. S., & Wernick, C. (2010). The effects of lower termination rates (mtrs) on retail price and demand. Communications & Strategies, 80(4), 119–140.
  • Haucap, J., Heimeshoff, U., & Karacuka, M. (2010). Competition in the Turkish mobile telecommunications market: Price elasticities and network substitution. Discussion Paper, 12.
  • Hausman, J. (1999). Cellular telephone, new products, and the CPI. Journal of Business & Economic Statistics, 17(2), American Statistical Association, 188-194.
  • Hausman, J. A., & A. J. Ros (June 2012). Correcting the OECD’s erroneous assessment of telecommunications competition in Mexico. CPI Antitrust Chronicle, Competition Policy International.
  • Hausman, J. A., & J. G. Sidak (2007). Evaluating market power using competitive benchmark prices rather than the hirschman-herfindahl index. Antitrust Law Journal, 74(2), 387-407.
  • Ida, T., & Kuroda, T. (2009). Discrete choice model analysis of mobile telephone service demand in Japan. Empirical Economics, 36(1), Springer, 65-80.
  • Kathuria, R., Uppal, R., & Mamta, (2009). An econometric analysis of the impact of mobile phones. Policy Paper Series Vodafone Public Policy Series, 9.
  • Latimaha, R., & Bahari, Z. (2016). Elasticity of demand for cellular phone network access in Malaysia. Jurnal of Ekonomi Malaysia, 50(2), 125-132.
  • Lee, D.H., & Lee, D.H. (2006). Estimating consumer surplus in the mobile telecommunications market: The case of Korea. Telecommunications Policy, 30, 605-621.
  • Madden, G., Grant C.N., & B. Dalzell (2004). A dynamic model of mobile telephony subscription incorporating a network effect. Telecommunications Policy, 28(2), 133-144.
  • Madden, G., & Neal, G.C. (2004). Economic determinants of global mobile telephony growth. Information and Economics Policy, 16, 519-534.
  • Okada, Y., & Hatta, K. (1999). The interdependent telecommunications demand and efficient price structure. Journal of the Japanese and International Economies, (13), 311-355.
  • Pesaran, M. H. (2004). General diagnostic tests for cross section dependence in panels. University of Cambridge, Working Paper, CWPE 0435.
  • Pesaran, M. H. (2006). Estimation and inference in large heterogenous panels with multifactor error structure. Econometrica, 74, 967-1012.
  • Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross-section dependence. Journal of Applied Econometrics, 22(2), 265-312.
  • Pesaran, M. H., Shin, Y., & Smith, R.P. (1997). Pooled estimation of long-run relationships in dynamic heterogeneous panels. University of Cambridge, Department of Applied Economics.
  • Pesaran, M. H., Shin, Y., & Smith, R.P. (1999). Pooled mean group estimation of dynamic heterogeneous panels. Journal of the American Statistical Association, 94(446), 621–634.
  • Pesaran, M. H., & Smith, R.P. (1995). Estimating long-run relationships from dynamic heterogeneous panels. Journal of Econometrics, 68(1), 79–113.
  • Pesaran, H. M., Ullah, A., & Yamagata, T. (2008). A bias-adjusted lm test of error cross-section independence. The Econometrics Journal, 11, 105-127.
  • Pesaran, M. H., & Yamagata, T. (2008). Testing slope homogeneity in large panels. Journal of Econometrics, 142(1), 50-93.
  • Rodini, M., Ward M.R., & Woroch G.A. (2002). Going mobile: substitutability between fixed and mobile access. Telecommunications Policy, 27, 457-476.
  • Tatoğlu, F.Y. (2017). Panel zaman serileri analizi. İstanbul: Beta Yayınları.
  • Taylor, L.D. (1994). Telecommunications demand in theory and practice. Dordrecht, Netherlands: Kluwer Academic Publishers.
  • UK Competition Commission. (2003). Vodafone, o2, orange and t-mobile: reports on references under section 13 of the telecommunications act 1984 on the charges made by vodafone, o2, orange and t-mobile for terminating calls from fixed and mobile networks. London.
  • Vogelsang, I. (2010). The relationship between mobile and fixedline communications: A survey. Information Economics and Policy, 22, 4-17.
  • Ward, M. R., & G. A. Woroch (2009). The effect of prices on fixed and mobile telephone penetration: Using price subsidies as natural experiments. Information Economics and Policy, 22(1).
  • Waverman, L., Meschi, M., & Fuss (2005). The impact of telecoms on economic growth in developing countries, The Policy Paper Series Vodofone Public Policy Series, 2.
  • Westerlund, J. (2008). Panel cointegration tests of the fisher effect. Journal of Applied Econometrics, 23(2), 193-223.

OECD ÜLKELERİNDE MOBİL İLETİŞİMİN TALEP ESNEKLİKLERİNİN TAHMİNİ

Year 2019, Volume: 15 Issue: 4, 991 - 1009, 01.12.2019
https://doi.org/10.17130/ijmeb.2019456394

Abstract

Mobil telekomünikasyon piyasalarında talep yapısı, politika yapıcılar ve operatörler için piyasa davranışları hakkında önemli bilgiler vermektedir. Bu çalışmada temel amaç mobil telekomünikasyon piyasalarındaki talep yapısını OECD ülkeleri örneği ile incelemek ve uzun dönem talep esnekliklerini ortaya koymaktır. Bu bağlamda 22 OECD ülkesinin 2005-2015 dönemine ait çeyrek yıllık panel verileri kullanılarak heterojenliğe izin veren AMG tahmincisi yardımı ile uzun dönem talep esneklikleri tahmin edilmiştir. Tahmin sonuçlarına göre ilgili ülke gurubu için talebin fiyat esnekliği uzun dönemde -0,53 ve gelir esnekliği 0,36’dır. Ortaya çıkan diğer sonuçlar ülkelere özgü niteliklere bağlı olarak talep esnekliklerinin ülkeler arasında ciddi ölçüde farklılaştığını ortaya koymaktadır.

References

  • Afridi, S.A., Farooq, S.U., Ullah, M.I., & Rahmani, R. (2010). The analysis of cellular services and estimating fixed to mobile price elasticities: A case study of United Kingdom. European Journal of Scientific Research, 40(3), 428-440.
  • Ahn, H., & Lee, M.H. (1999). An econometric analysis of the demand for access to mobile telephone networks. Information Economics and Policy, 11, 297-305.
  • Banerjee, A., & Ros, A.J. (2004). Drivers of demand growth for mobile telecommunications services: Evidence from international panel data. National Economic Research Associates, Cambridge.
  • Breusch, T. S., & Pagan, A. R. (1980). The lagrange multiplier test and its applications to model specification in econometrics. The Review of Economic Studies, 47(1), 239-253.
  • Danaher, P. (2002). Optimal pricing of new subscription services: Analysis of a market experiment. Marketing Science, 21(2), 119-138.
  • Dewenter, R., & J. Haucap (December, 2004). Demand elasticities for mobile telecommunications in Austria. University of the Federal Armed Forces Hamburg Discussion Paper, 33.
  • Eberhart M., & Bond, S.R. (2009). Cross-sectional dependence in non-stationary panel models: A novel estimator. Nordic Econometric Meetings, Sweeden.
  • Eberhart, M., & Teal F. (2010). Productivity analysis in the global manufacturing production. Department of Economics, University of Oxford.
  • Garbacz, C., & Thompson, H.G. (2007). Demand for telecommunication services in developing countries. Telecommunications Policy, 31, 276-289.
  • Growitsch, C., Marcus, J. S., & Wernick, C. (2010). The effects of lower termination rates (mtrs) on retail price and demand. Communications & Strategies, 80(4), 119–140.
  • Haucap, J., Heimeshoff, U., & Karacuka, M. (2010). Competition in the Turkish mobile telecommunications market: Price elasticities and network substitution. Discussion Paper, 12.
  • Hausman, J. (1999). Cellular telephone, new products, and the CPI. Journal of Business & Economic Statistics, 17(2), American Statistical Association, 188-194.
  • Hausman, J. A., & A. J. Ros (June 2012). Correcting the OECD’s erroneous assessment of telecommunications competition in Mexico. CPI Antitrust Chronicle, Competition Policy International.
  • Hausman, J. A., & J. G. Sidak (2007). Evaluating market power using competitive benchmark prices rather than the hirschman-herfindahl index. Antitrust Law Journal, 74(2), 387-407.
  • Ida, T., & Kuroda, T. (2009). Discrete choice model analysis of mobile telephone service demand in Japan. Empirical Economics, 36(1), Springer, 65-80.
  • Kathuria, R., Uppal, R., & Mamta, (2009). An econometric analysis of the impact of mobile phones. Policy Paper Series Vodafone Public Policy Series, 9.
  • Latimaha, R., & Bahari, Z. (2016). Elasticity of demand for cellular phone network access in Malaysia. Jurnal of Ekonomi Malaysia, 50(2), 125-132.
  • Lee, D.H., & Lee, D.H. (2006). Estimating consumer surplus in the mobile telecommunications market: The case of Korea. Telecommunications Policy, 30, 605-621.
  • Madden, G., Grant C.N., & B. Dalzell (2004). A dynamic model of mobile telephony subscription incorporating a network effect. Telecommunications Policy, 28(2), 133-144.
  • Madden, G., & Neal, G.C. (2004). Economic determinants of global mobile telephony growth. Information and Economics Policy, 16, 519-534.
  • Okada, Y., & Hatta, K. (1999). The interdependent telecommunications demand and efficient price structure. Journal of the Japanese and International Economies, (13), 311-355.
  • Pesaran, M. H. (2004). General diagnostic tests for cross section dependence in panels. University of Cambridge, Working Paper, CWPE 0435.
  • Pesaran, M. H. (2006). Estimation and inference in large heterogenous panels with multifactor error structure. Econometrica, 74, 967-1012.
  • Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross-section dependence. Journal of Applied Econometrics, 22(2), 265-312.
  • Pesaran, M. H., Shin, Y., & Smith, R.P. (1997). Pooled estimation of long-run relationships in dynamic heterogeneous panels. University of Cambridge, Department of Applied Economics.
  • Pesaran, M. H., Shin, Y., & Smith, R.P. (1999). Pooled mean group estimation of dynamic heterogeneous panels. Journal of the American Statistical Association, 94(446), 621–634.
  • Pesaran, M. H., & Smith, R.P. (1995). Estimating long-run relationships from dynamic heterogeneous panels. Journal of Econometrics, 68(1), 79–113.
  • Pesaran, H. M., Ullah, A., & Yamagata, T. (2008). A bias-adjusted lm test of error cross-section independence. The Econometrics Journal, 11, 105-127.
  • Pesaran, M. H., & Yamagata, T. (2008). Testing slope homogeneity in large panels. Journal of Econometrics, 142(1), 50-93.
  • Rodini, M., Ward M.R., & Woroch G.A. (2002). Going mobile: substitutability between fixed and mobile access. Telecommunications Policy, 27, 457-476.
  • Tatoğlu, F.Y. (2017). Panel zaman serileri analizi. İstanbul: Beta Yayınları.
  • Taylor, L.D. (1994). Telecommunications demand in theory and practice. Dordrecht, Netherlands: Kluwer Academic Publishers.
  • UK Competition Commission. (2003). Vodafone, o2, orange and t-mobile: reports on references under section 13 of the telecommunications act 1984 on the charges made by vodafone, o2, orange and t-mobile for terminating calls from fixed and mobile networks. London.
  • Vogelsang, I. (2010). The relationship between mobile and fixedline communications: A survey. Information Economics and Policy, 22, 4-17.
  • Ward, M. R., & G. A. Woroch (2009). The effect of prices on fixed and mobile telephone penetration: Using price subsidies as natural experiments. Information Economics and Policy, 22(1).
  • Waverman, L., Meschi, M., & Fuss (2005). The impact of telecoms on economic growth in developing countries, The Policy Paper Series Vodofone Public Policy Series, 2.
  • Westerlund, J. (2008). Panel cointegration tests of the fisher effect. Journal of Applied Econometrics, 23(2), 193-223.
There are 37 citations in total.

Details

Primary Language Turkish
Journal Section Research Article
Authors

Mikail Kar This is me

Bahar Baysal Kar This is me

Publication Date December 1, 2019
Published in Issue Year 2019 Volume: 15 Issue: 4

Cite

APA Kar, M., & Baysal Kar, B. (2019). OECD ÜLKELERİNDE MOBİL İLETİŞİMİN TALEP ESNEKLİKLERİNİN TAHMİNİ. Uluslararası Yönetim İktisat Ve İşletme Dergisi, 15(4), 991-1009. https://doi.org/10.17130/ijmeb.2019456394