Demand function estimation for local telephone service in Monterrey
DOI:
https://doi.org/10.29105/rinn7.13-3Keywords:
Demand Estimation, Pool Series, Monterrey, TelecommunicationAbstract
In this study we estimate a model to explain the consumption demand for local telephone service in Monterrey. In this paper we provide a theoretical framework of the variables that affect the demand function. The main problem for the estimation is that we have different telephone services from the same supplier. We consider data of one year from 2006 to 2007, and we estimate a multivariate linear model. We also estimate the variable “income level” using 12 socioeconomic variables. The results indicate that it is not necessaryn to include in the model the seasonality factor. The variables of the model are statistically significant, and we also find that the expected signs of the variable are based on the economic theory. The income level was the variable with more impact in the demand.
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