### Abstract

Original language | English |
---|---|

Place of Publication | Amsterdam |

Publisher | Tinbergen Instituut |

Publication status | Published - 1997 |

### Publication series

Name | Discussion paper TI |
---|---|

No. | 97-080/3 |

### Fingerprint

### Cite this

*On the Distance Dependence of the Price Elasticity of Telecommunications Demand; Meta-analysis, and Alternative Theoretical Backgrounds*. (Discussion paper TI; No. 97-080/3). Amsterdam: Tinbergen Instituut.

}

**On the Distance Dependence of the Price Elasticity of Telecommunications Demand; Meta-analysis, and Alternative Theoretical Backgrounds.** / Ouwersloot, Hans; Rietveld, Piet.

Research output: Working paper › Professional

TY - UNPB

T1 - On the Distance Dependence of the Price Elasticity of Telecommunications Demand; Meta-analysis, and Alternative Theoretical Backgrounds

AU - Ouwersloot, Hans

AU - Rietveld, Piet

PY - 1997

Y1 - 1997

N2 - The positive correlation between the absolute price elasticity of telecommunications demand and the distance of the calling relation is well known. In this paper we first present a meta-analysis of existing studies to buttress the distance dependence empirically. The analysis confirms the existence of distance dependence, and gives insight into the size of the effect.Next we look for various explanations of the distance dependence. We analyse the roles of the functional form of demand functions in conjunction with the dependence of price on distance, and consider whether spatial interaction theory can provide an explanation. One of the interesting findings is that the price effect may explain the distance dependence, but that this explanation is not unequivocal. On the other hand we show that incorporating spatial interaction theory elements in a quite basic utility maximization model of information demand also leads to distance dependent telecommunications demand (keeping prices of calling fixed).

AB - The positive correlation between the absolute price elasticity of telecommunications demand and the distance of the calling relation is well known. In this paper we first present a meta-analysis of existing studies to buttress the distance dependence empirically. The analysis confirms the existence of distance dependence, and gives insight into the size of the effect.Next we look for various explanations of the distance dependence. We analyse the roles of the functional form of demand functions in conjunction with the dependence of price on distance, and consider whether spatial interaction theory can provide an explanation. One of the interesting findings is that the price effect may explain the distance dependence, but that this explanation is not unequivocal. On the other hand we show that incorporating spatial interaction theory elements in a quite basic utility maximization model of information demand also leads to distance dependent telecommunications demand (keeping prices of calling fixed).

M3 - Working paper

T3 - Discussion paper TI

BT - On the Distance Dependence of the Price Elasticity of Telecommunications Demand; Meta-analysis, and Alternative Theoretical Backgrounds

PB - Tinbergen Instituut

CY - Amsterdam

ER -