Cross-Subsidies in Telecommunications: Roadblocks on the Road to More Intelligent Telephone Pricing

A decade ago, Alfred Kahn challenged regulators to adopt more efficient telephone pricing policies. They have yet to respond and instead have maintained a system of inefficient cross-subsidies. While some argue that the current system promotes universal telephone service, a careful examination reveals that the cross-subsidies do not further that goal. Professors Kaserman and Mayo argue that regulators maintain the current system because they believe that its pattern of cross-subsidization benefits a politically influential class-local residential customers. Kaserman and Mayo contend, however, that the regulators are wrong. the benefits from the current cross-subsidies are so diffused that abolishing them will not ultimately affect individual customers

A Time-Series Analysis of U.S. Kidney Transplantation and the Waiting List: Donor Substitution Effects and "Dirty Altruism"

This paper provides an econometric analysis of the relationship between live and deceased (cadaveric) kidney donations for the United States for the period 1992:IV through 2006:II. Statistical analysis shows that increases in deceased donor transplants reduce future live donor grafts, controlling for both waiting list effects and exogenous trends. This result has important, and potentially dire, implications for efforts to reduce the organ shortage by increasing use of cadaver donors.Kidney Transplantations; Donor Substitution Effects; Dirty Altruism; Cointegration

Is the “Dominant Firm” Dominant? An Empirical Analysis of AT&T’S Market Power

In this article, we estimate the degree of market power held by AT&T in the interstate long-distance market in the postdivestiture period. Our approach makes use of the dominant firm/competitive fringe model to impose the structure needed both to obtain estimates of the relevant structural parameters and to translate these parameters into an estimate of AT&T\u27s residual demand elasticity and associated Lerner index. Because of the continued presence of regulation and other considerations, however, a direct estimation of the residual demand elasticity is not feasible. Consequently, we take a more indirect approach that combines estimation of the elasticity of fringe firm supply, market demand estimation, and extant market share data to generate estimates of the desired elasticity. The resulting estimates strongly support the conclusion that AT&T lacks significant market power in the postdivestiture long-distance market

Neoclassical theory of durable good diffusion

Existing studies that deal with the diffusion of durable good innovations have been justifiably criticized for their common lack of an explicit testable theory of new product growth. This paper attempts to remedy this situation by providing a theoretical model of market penetration of new durable goods that is derived from the basic assumption that potential users of the new intermediate product attempt to minimize the discounted costs of production over time. The resulting model defines a time path of short-run equilibrium market shares that are determined by the cost characteristics (capital cost and operating and maintenance expenses) of both the new innovation and the equipment that it is designed to replace, the age distribution of the existing capital stock, and the growth rate of the adopting sector. This model is shown to exhibit several attractive features lacking in existing models of the diffusion process. First, it yields a number of testable hypotheses, some of which have received indirect empirical support in previous studies on the subject. Second, it is operational in the absence of historical data on the market experience of the new good under investigation. And third, it is capable of generating, on the basis of such ex ante information, the complete range of functional forms used in prior models to represent the relationship between market share and elapsed time since introduction of the new innovation. These features render the model inherently superior to existing studies for the analysis of emerging products and frontier technologies for which market data are not yet available

A Time-Series Analysis of U.S. Kidney Transplantation and the Waiting List: Donor Substitution Effects and "Dirty Altruism"

This paper provides an econometric analysis of the relationship between live and deceased (cadaveric) kidney donations for the United States for the period 1992:IV through 2006:II. Statistical analysis shows that increases in deceased donor transplants reduce future live donor grafts, controlling for both waiting list effects and exogenous trends. This result has important, and potentially dire, implications for efforts to reduce the organ shortage by increasing use of cadaver donors

A Time-Series Analysis of U.S. Kidney Transplantation and the Waiting List: Donor Substitution Effects and "Dirty Altruism"

This paper provides an econometric analysis of the relationship between live and deceased (cadaveric) kidney donations for the United States for the period 1992:IV through 2006:II. Statistical analysis shows that increases in deceased donor transplants reduce future live donor grafts, controlling for both waiting list effects and exogenous trends. This result has important, and potentially dire, implications for efforts to reduce the organ shortage by increasing use of cadaver donors