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Local measured service revisited: A Southern Wisconsin test case

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  • Paul Isely
  • Matthew Roelofs

Abstract

Pricing local telephone service on a usage-sensitive basis has long been thought to have welfare-enhancing effects over the traditional flat-rate pricing scheme. The authors examine a new data set containing observations of residential and business calling patterns both before and after a switch to measured service. For a rural area of south-central Wisconsin, the data provide a rare opportunity to study the same consumers both before and after such a pricing change is made. Comparing the measured system used in this area to the previous literature shows that, even though the current system does not contain all the elements of a theoretically optimal pricing scheme, significant welfare gains are still achieved. Copyright International Atlantic Economic Society 1998

Suggested Citation

  • Paul Isely & Matthew Roelofs, 1998. "Local measured service revisited: A Southern Wisconsin test case," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 26(2), pages 206-213, June.
    • Handle: RePEc:kap:atlecj:v:26:y:1998:i:2:p:206-213
    DOI: 10.1007/BF02299362
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    References listed on IDEAS

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    1. Park, Rolla Edward & Mitchell, Bridger M. & Wetzel, Bruce M. & Alleman, James H., 1983. "Charging for local telephone calls : How household characteristics affect the distribution of calls in the GTE Illinois experiment," Journal of Econometrics, Elsevier, vol. 22(3), pages 339-364, August.
    2. A. W. Coats, 1996. "Conclusion," History of Political Economy, Duke University Press, vol. 28(5), pages 395-400, Supplemen.
    3. Renshaw, Edward, 1985. "A Note on Equity and Efficiency in the Pricing of Local Telephone Services," American Economic Review, American Economic Association, vol. 75(3), pages 515-518, June.
    4. Griffin, James M & Mayor, Thomas H, 1987. "The Welfare Gain from Efficient Pricing of Local Telephone Services," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 465-487, October.
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