nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2014‒07‒21
two papers chosen by
Walter Frisch
Universität Wien

  1. Disentangling income and price effects in the demand for time online By González Chapela, Jorge
  2. Evaluating a Decade of Mobile Termination Rate Regulation By Christos Genakos; Tommaso Valletti

  1. By: González Chapela, Jorge
    Abstract: The large negative impact of income on time spent online has been attributed to a negative own-price effect created by variation in the opportunity cost of time across internet users. Nonetheless, the coefficient on income could also be capturing a negative income effect: High-income users could reduce time spent online to consume, for example, leisure activities of higher quality. This paper estimates a demand function for time online using a time-use survey containing information on household income and individual labor earnings. In accordance with the negative income effect hypothesis, income still exerts a large negative impact after earnings are controlled for, whereas the response to earnings is negative only in certain ranges of the earnings distribution.
    Keywords: Internet usage; Shadow value of time; Spanish Time Use Survey; Type II Tobit model.
    JEL: J22 L86
    Date: 2014–07–14
  2. By: Christos Genakos; Tommaso Valletti
    Abstract: We re-consider the impact that regulation of call termination on mobile phones has had on mobile customers' bills. Using a large panel covering 27 countries, we find that the "waterbed" phenomenon, initially observed until early 2006, becomes insignificant on average over the 10-year period, 2002-2011. We argue that this is related to the changing nature of the industry, whereby mobile-to-mobile traffic now plays a much bigger role compared to fixed-to-mobile calls in earlier periods. Over the same decade, we find no evidence that regulation caused a reduction in mobile operators' profits and investments.
    Keywords: Mobile telephony, termination rates, waterbed effect
    JEL: D12 D43 L5 L96 L98
    Date: 2014–07

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