| Abstract: | Lifeline programs sponsored by the Federal Communications Commission (FCC) in cooperation with the states and Local Exchange Companies (LECs) are authorized to increase telephone penetration. Estimates of a variant of Perl's (1983) economic model with 1990 Census Data broken to the state level indicate that expenditures on these programs have a positive statistical effect on telephone penetration in most models. However, program elasticities are extremely small, suggesting that very large expenditure increases per poor household would have little effect on telephone penetration. Importantly, there is no relationship between the size of the state program elasticity and the level of state income or the magnitude of state poverty. We also demonstrate that the 1990 Census Data is superior to the Current Population Survey as a data base. |
