Econometric modeling of business Telecommunications demand using Retina and Finite Mixtues

In this paper we estimate the business telecommunications demands for local, intra-LATA and inter-LATA services, using US data from a Bill Harvesting R survey carried out during 1997. We model heterogeneity, which is present among firms due to a variety of different business telecommunication needs, by estimating normal heteroskedastic mixture regressions. The results show that a three-component mixture model fits the demand for local services well, while a two-component structure is used to model intra-LATA and inter-LATA demand. We characterize the groups in terms of their differences among the coefficients, and then use Retina to perform automatic model selection over an expanded candidate regressor set which includes heterogeneity parameters as well as transformations of the original variables.Telecommunication Demand Models, Local calls, Inter-LATA calls, intra-LATA calls, Retina, Flexible Functional Forms, Heterogeneity, Finite Mixtures.

Econometric Modeling of Business Telecommunications Demand using RETINA and Finite Mixtures.

In this paper we estimate the business telecommunications demands for local,intra-LATA and inter-LATA services, using US data from a Bill Harvesting (R) survey carried out during 1997. We model heterogeneity, which is present among firms due to a variety of different business telecommunication needs, by estimating normal heteroskedastic mixture regressions. The results show that a three-component mixture model fits the demand for local services well, while a two-component structure is used to model intra-LATA and inter-LATA demand. We characterize the groups in terms of their differences among the coefficients, and then use RETINA to perform automatic model selection over an expanded candidate regressor set which includes heterogeneity parameters as well as transformations of the original variables. Our models improve substantially the in-sample fit as well the out-of-sample predictive ability over alternative candidate models. RETINA suggests that the final demand specification should include telephone equipment variables as relevant regressors. On the other hand, the output of the firm, as well as its physical extension, have second order, yet significant effects on the demand for telecommunication services. Estimated elasticities are different for the three demands but always positive for access form (single-line or private network).Telecommunication Demand Models, Local calls, inter-LATA calls, intra-LATA calls, RETINA, Flexible Functional Forms, Heterogeneity, Finite Mixtures.

Demand for Internet Access and Use in Spain

The goal of this paper is to analyze a new phenomenon: Internet demand in Spain. To do so, we use a new high quality data set and advanced econometric techniques for estimating Internet demand functions, incorporating the socio-demographic characteristics of the individuals. We begin with a graphic analysis of the data, searching for relationships between the different characteristics. Then we specify and estimate two econometric models, one for broadband access at home and another for Internet use intensity. We also find that 25.2% of the Spanish population accesses the Internet at home, but less than half uses broadband connection. This demand is positively related to income and other technological attributes and negatively related to socio-demographic attributes such as habitat and age. Our results are compatible with previous literature for other countries, although there is a important difference: broadband Internet connections are still considered as a luxury good in Spain.Broadband, Internet Access, Internet Use, Selection Bias Correction, Multinomial Logit Models, marginal effects, elasticities.