A note on Peltzman's theory of offsetting consumer behavior

A re-estimation of the basic Peltzman (1975) model using a richer data set strongly indicates that mandated automobile safety legislation has been important in reducing traffic fatalities. There is little or no evidence of offsetting consumer behavior.     

How effective is automobile safety regulation?

Loeb(1989) questions the results of recent work on automobile safety inspection (Garbacz and Kelly, 1987) in which the results of a paper by Leob and Gilad (1984) were questioned. Specifically, their time series model, using New Jersey data, is missing a key economic variable (accident price) as well as some well-known variables associated with traffic accidents (yothful drivers and a proxy for drunk driving). An estimate of their model, with US data, results in no statistical effect for automobile inspection variables (Garbacz and Kelly, 1987).     

Economic impacts of mobile versus fixed broadband

Broadband telecommunication service is growing rapidly and its economic impact is likely to vary considerably around the globe. Considerable interest is being shown in wireless broadband, especially in low income and rural areas. This study focuses on the direct effect (broadband penetration as an input), and separately, the productive efficiency effect of broadband (as an information network externality), using a model developed in Thompson and Garbacz (2007). Aggregate fixed and mobile broadband usage and their effect are analyzed and compared first on a sample of forty-three countries with sufficient data. The same models are used on samples of high income and low income countries. It is hypothesized that the rapid growth of broadband could have a stronger effect for low income countries and their initial levels of network development. Key variables are adjusted to a per household basis, using information on household size. Due to the endogeneity of key variables, instrumental variables are employed to estimate separate equations for mobile broadband and fixed broadband. Predicted values for these variables are used in the final equations in order to adjust for endogeneity and omitted variable bias. The results of the model estimated for the full sample indicate that mobile broadband has an important direct effect on GDP, but fixed broadband has an effect no different than zero. In the models with high and low income samples it is apparent that low income countries derive significantly more benefit from mobile broadband. Estimates from the Stochastic Frontier Model find mobile broadband to be a significant driver of growth via a reduction of inefficiency.     

Universal telecommunication service: A world perspective

Worldwide telecommunications demand is estimated in models for business and residential mainline telephone, and for mobile telephone service using separate models for developed and developing countries for the period 1996–2001. We test for cross-price elasticities between mainline and mobile service and find that the results are generally suggestive of current complementary relationships. We find residential monthly price elasticity to be no different than zero for a sample of developing countries, but the connection elasticity is statistically significant. Mobile monthly service elasticity is much larger than those for mainline service, suggesting that universal service in developing countries might be promoted more effectively with subsidies for mobile service. Income elasticities for the residential model are modest while the mobile service model income elasticity for developing countries is much higher. Expanding markets, income growth and enhanced education may be the ultimate universal service promoters.     

Demand for telecommunication services in developing countries

Living standards and economic growth in developing countries are invariably linked to the availability and use of telecom services. Effective policy decisions require the best estimates of the drivers of these services. In this paper, telecommunications demand is estimated in models for residential mainline and mobile telephone service for developing countries for the period 1996–2003. The paper tests for cross-price effects between mainline and mobile service and its findings have important policy implications. It finds residential monthly price elasticity to be insignificant for developing countries, but the connection elasticity is larger than generally found in the literature. Mobile monthly price elasticities are very large. A new and important empirical finding is that although wireline phones are substitutes in the mobile market, the contrary is not true—mobile phones are not substitutes in the wireline market, and in fact may be considered complements. This lack of symmetry has important implications for properly defining telecom markets. Universal service subsidies and competitive market initiatives should be reevaluated in light of the paper's elasticity estimates. Increased competition, income growth and enhanced education may be the ultimate universal service promoters.     

Estimating Telephone Demand with State Decennial Census Data from 1970–1990: Update with 2000 Data

Adding the 2000 decennial census data to our pooled logit model results in much stronger evidence that targeted subsidy programs to add poor households to the network are ineffective and very costly. Untargeted programs are about nine times more expensive than targeted programs. Overall higher penetration rates are fueled by the declining real price of access and rapid income growth in the 1990s. In addition, our estimate of the first integrated access and new services model with 2000 decennial census data suggests that cell phones and Internet are, in part, responsible for the recent surge in penetration, but precise estimates are difficult without price information.     

Universal Service Versus Universal Competition: A Review Article of Crandall and Waverman

Journal of Regulatory Economics -