Show simple item record

dc.contributor.authorMadden, Gary
dc.date.accessioned2017-01-30T14:54:38Z
dc.date.available2017-01-30T14:54:38Z
dc.date.created2012-04-17T20:01:23Z
dc.date.issued2010
dc.identifier.citationMadden, Gary. 2010. Economic welfare and universal service. Telecommunications Policy. 34 (1-2): pp. 110-116.
dc.identifier.urihttp://hdl.handle.net/20.500.11937/41701
dc.identifier.doi10.1016/j.telpol.2009.11.001
dc.description.abstract

Panzar (2000) argues that the composition of universal service bundles depend on both economic and political considerations. The factors policymakers consider in determining the universal service bundle include: (a) the strength of network effects, (b) costs of individual elements that comprise the bundle, and (c) redistribution goals. From an economic perspective, elements should only be included when the service embodies substantial network externalities. Interestingly, while there is an abundance of theoretical and applied analyses of the rationale for universal service and associated costs (and distortions), there is a paucity of available research on societal economic welfare gains. Accordingly, this study develops a procedure to determine the economic welfare gain from the universal provision of telecommunications services. Following [Hausman, 1981] and [Hausman et al., 1997], the study provides a theoretical measure of welfare change based on the compensating variation (CV) approach. In particular, the study modifies Hausman's CV formula to incorporate a dynamic model specified by Madden and Coble-Neal (2004). Importantly, this demand specification incorporates the notion that the current network size depends on the past size of the network and expectations of future size. This demand specification is the result of dynamic optimising behaviour by a representative consumer. Finally, the representative consumer's subscription choice is influenced by a telecommunications service network effect.

dc.publisherPergamon
dc.subjecttelecommunications
dc.subjectconsumer welfare
dc.subjectuniversal service
dc.titleEconomic welfare and universal service
dc.typeJournal Article
dcterms.source.volume34
dcterms.source.number1-2
dcterms.source.startPage110
dcterms.source.endPage116
dcterms.source.issn03085961
dcterms.source.titleTelecommunications Policy
curtin.departmentSchool of Economics and Finance
curtin.accessStatusFulltext not available


Files in this item

Thumbnail

This item appears in the following Collection(s)

Show simple item record