Use of informal mobile telephony in low income households in Colombia

Access to mobile telephony in Colombia exhibits rather interesting features compared to other countries. Colombia witnessed the beginning of a new alternative for communication consisting in the use of informal resale of minutes on the streets and small stores during the first years of this century. In this paper we are interested in analyzing the main factors that determine the utilization of this kind of service. We use a probabilistic model to explain the characteristics of the people that use `informal resale´ on the streets and we find that people in the modality of prepayment and people from small cities has a higher probability of using this alternative. It is also found that people in the firm-leader use more often this service. These results seem indicate that price differentials among on-net and off-net and between prepaid and postpaid are the causes of the rise of this economic activity.***El acceso a la telefonía móvil en Colombia evidencia ciertas particularidades con respecto a otros países. En Colombia surgió una nueva alternativa de comunicación que consistía en la venta de minutos de celular en las calles y en pequeños negocios durante los primeros años de ésta década. En este documento se analizan las principales características de quienes usan esta modalidad de comunicación con base en una encuesta dirigida a usuarios y no usuarios de bajos ingresos. Se usa un modelo probabilístico para explicar las características de las personas que lo usan y se encuentra que las personas que están en la modalidad de contrato prepago y que viven en ciudades pequeñas tienen una mayor probabilidad de usar esta alternativa de comunicación. De otro lado se encuentra que quienes están con el operador dominante tienden a usar este servicio también de una forma más notoria. Estos resultados parecen indicar que los diferenciales de precios entre las llamadas off-net y on-net así como entre prepago y postpago son los que alimentaron el surgimiento de esta actividad.Mobile telephony, ICT, gender gap, Resale

An approximation to the digital divide among low income people in Colombia, Mexico and Perú: two composite indexes

This study examines the determinants of information and communications technology(ICT) use and access of low-income people in three developing countries: Colombia,Mexico and Peru. We focus on cross-country differences and similarities in ICTs use acrossgender, age, education and income, using two composite indicators of ICT. The mainsimilarity across the countries is that education is by far the single most important factorlimiting the digitalization of low-income people. The impact of income was low althoughpositive. There is not apparently a gender gap in Colombia and Mexico but one in Peru.Our findings also suggest that when using a composite indicator that only include the`advanced ICTs´, disadvantage people among the low-income people can be moreconstrained in the use and access of more advanced information and communicationstechnologies.****El estudio analiza los determinantes de uso y acceso a las tecnologías de información ycomunicación en personas de bajos ingresos en pasases como Colombia, México y Perú. Elpunto central esta en analizar las diferencias entre países de acuerdo a diferentes variablessocioeconómicas. Se encuentra que la variable que más explica el nivel de acceso digital esla escolaridad. De otro lado no se encuentra una brecha por género sino en Perú. Losresultados también indican que cuando solo se tienen en cuenta las tecnologías más`avanzadas´, las diferencias entre la población son más notorias.Digital divide, ICT, gender gap, Internet

Improved Sequential Stopping Rule for Monte Carlo Simulation

This paper presents an improved result on the negative-binomial Monte Carlo technique analyzed in a previous paper for the estimation of an unknown probability p. Specifically, the confidence level associated to a relative interval [p/\mu_2, p\mu_1], with \mu_1, \mu_2 > 1, is proved to exceed its asymptotic value for a broader range of intervals than that given in the referred paper, and for any value of p. This extends the applicability of the estimator, relaxing the conditions that guarantee a given confidence level.Comment: 2 figures. Paper accepted in IEEE Transactions on Communication

Price setting behaviour in Spain: stylised facts using consumer price micro data

This paper identifies the basic features of the price setting mechanism in the Spanish economy, using a large dataset that contains over 1.1 million price records and covers around 70% of the expenditure on the CPI basket. In particular, the paper identifies differences in the frequency and size of price adjustments across types of products and explores how these general features are affected by certain specific factors: seasonality, the level of inflation, changes in indirect taxation and the practice of using psychological and round prices. We find that prices do not change often but do so by a large amount, although there is a marked heterogeneity across products. Moreover, the high frequency of price reductions suggests that there is no strong downward rigidity. Our evidence also supports the use of time and state-dependent pricing strategies. JEL Classification: E31, D40, C25consumer prices, frequency of price changes, price setting

The price setting behaviour of Spanish firms: evidence from survey data

This paper reports the results of a survey carried out by the Banco de España on a sample of around 2000 spanish firms to deepen the understanding of firms’ price setting behaviour. The main findings may be summarised as follows. Most Spanish firms are price setters that use predominantly state-dependent rules or a combination of time- and statedependent rules when reviewing their prices. Changes in costs are the main factor underlying price increases, whereas changes in market conditions (demand and competitors’ prices) are the main driving forces of price decreases. The degree of price flexibility is directly related to the share of energy inputs over total costs and to the intensity of competition, whereas it is inversely linked to the labour share. The three theories of price stickiness that receive the highest empirical support are implicit contracts, coordination failure and explicit contracts. JEL Classification: D40, E31price setting, Price stickiness, survey data

Price setting behaviour in Spain: evidence from micro PPI data

This paper identifies the basic features of price setting behaviour at the producer level in the Spanish economy using a large dataset containing the micro data underlying the construction of the PPI over the period 1991-1999. It explores how these general features are affected by some specific factors (cost structure, degree of competition, demand conditions, government intervention, level of inflation, seasonality, and the practice of using attractive prices) and presents a comparison of price setting practices at the producer and at the consumer level to ascertain whether the retail sector augments or mitigates price stickiness. We find that prices do not change often but do so by a large amount. The cost structure, proxied by the labour share and the relevance of raw materials, and the degree of competition, proxied by import penetration, affect price flexibility. We also find some evidence that producer prices are more flexible than consumer prices. JEL Classification: E31, D40frequency of price changes, price setting, producer prices

Do decreasing hazard functions for price changes make any sense?

A common finding in empirical studies using micro data on consumer and producer prices is that hazard functions for price changes are decreasing. This means that a firm will have a lower probability of changing its price the longer it has kept it unchanged. This result is at odds with standard models of price setting. Here a simple explanation is proposed: decreasing hazards may result from aggregating heterogeneous price setters. We show analytically the form of this heterogeneity effect for the most commonly used pricing rules and find that the aggregate hazard is (nearly always decreasing. Results are illustrated using Spanish producer and consumer price data. We find that a very accurate representation of individual data is obtained by considering just 4 groups of agents: one group of flexible Calvo agents, one group of intermediate Calvo agents and one group of sticky Calvo agents plus an annual Calvo process. JEL Classification: C40, D40, E30hazard function, Heterogeneous Agents, mixture models, price setting models