Estimating the demand for ADSL and ISDN services in Greece

The aim of this paper is to investigate the demand for broadband services in Greece and to estimate the price elasticity of the demand for ADSL and ISDN services as well as the cross-price elasticity between the two services. The empirical analysis uses the 384 kbps connections since for the period...

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Bibliographic Details
Published in:Telecommunications policy 2009-11, Vol.33 (10), p.621-627
Main Authors: Yannelis, Demetrius, Christopoulos, Apostolos G., Kalantzis, Fotis G.
Format: Article
Language:English
Subjects:
ADSL
Broadband
Comparative analysis
Cross-price elasticity
Demand
Demand analysis
Estimating techniques
Estimation
Greece
Internet
ISDN
Own-price elasticity
Price elasticity
Service introduction
Studies
Telecommunications
Telecommunications policy
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Summary:The aim of this paper is to investigate the demand for broadband services in Greece and to estimate the price elasticity of the demand for ADSL and ISDN services as well as the cross-price elasticity between the two services. The empirical analysis uses the 384 kbps connections since for the period examined, over 85% of the total ADSL customers in Greece are connected at this bandwidth. The empirical analysis is based on an ad-hoc specification of the demand equation, with no reference to the utility maximization problem of the representative consumer. The results of the analysis show that both demands are inelastic. In addition, cross-price elasticity for ADSL is negative, indicating that ISDN is a complement to ADSL, whereas the demand for ISDN is almost neutral to ADSL.
ISSN:0308-5961
1879-3258
DOI:10.1016/j.telpol.2009.07.006