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An econometric assessment of telecommunications prices and consumer surplus in Mexico using panel data

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  • Jerry Hausman
  • Agustin Ros

Abstract

We analyze telecommunications prices in Mexico by using a panel data of countries similar to Mexico to estimate demand models for mobile and fixed-line telecommunications. We find that Mexico’s actual mobile and fixed-line prices are below the predicted prices based on similar countries’ prices. Mexican consumers are paying lower prices than what one would expect based on comparisons of comparable countries. We calculate that in 2011 Mexican consumers received at least $4–$5 billion (USD) in consumer surplus from these lower mobile prices and in 2010 they received over $1 billion (USD) in consumer surplus from these lower fixed-line prices. These findings are in contrast to the general perception that concentrated telecommunications markets in Mexico are resulting in high prices and harming consumers. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Jerry Hausman & Agustin Ros, 2013. "An econometric assessment of telecommunications prices and consumer surplus in Mexico using panel data," Journal of Regulatory Economics, Springer, vol. 43(3), pages 284-304, June.
    • Handle: RePEc:kap:regeco:v:43:y:2013:i:3:p:284-304
    DOI: 10.1007/s11149-013-9212-0
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    References listed on IDEAS

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    8. Nevo, Aviv, 2001. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Econometrica, Econometric Society, vol. 69(2), pages 307-342, March.
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    More about this item

    Keywords

    Telecommunications demand; Econometric demand model ; Consumer surplus; Mexico; C33; C36; L51; L96;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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