Intra-LATA toll elasticities

Regulatory commission hearings on intra-LATA toll competition have focused, for the purpose of revenue rebalancing, on the market elasticity of demand for intra-LATA toll service. This paper presents estimates of the intra-LATA toll elasticity based on a detailed model of residential customers' demand for short-haul service. The results are compared with those from other studies. The consensus of the studies indicates a residential elasticity of around -0.4.