The demand for telephone services
These are the results of an empirical study based on data from the telephone system in Hull (UK). A discussion of the nature of the demand for telephone services and a summary of the existing evidence are followed by separate demand estimates for the three elements of access, local and trunk calls. The equations for access are not very reliable, but better results are obtained for call volumes. Price elasticities appear to be around- 0.2 for both local and trunk calls, but this figure is not significantly different from zero for local calls. The number of customers has an elasticity slightly above one, suggesting there is a positive externality in the system. Real income produces an elasticity of up to two, and in general the results obtained here are somewhat higher than in previous work. The first section is a brief introduction to the main features of the demand for telephone services which impinge on the empirical work that follows, and the second is an overview of recent British and other demand studies. The third, and main, section reports the results of a recent study based on data from the Hull telephone system. The fourth section is a brief summary and conclusion.
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