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An Economic Analysis of the Service Area Scheme

Author

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  • Ramonette B. Serafica

    (Research Fellow I, Philippine Institute for Development Studies)

Abstract

Under the service area scheme, firms are required to install basic telephone service as a condition to complete in the cellular and international phone service markets. This study looks at the case of Metro Manila which was arbitrarily subdivided by the regulator into four sections as part of the scheme. Using a process model, the cost of providing basic telephone service in each section in determined for different output levels corresponding to market shares likely to be captured by a new firm. The cost data provided by the process model are then used as input for the econometric analysis where a translog cost function is estimated.

Suggested Citation

  • Ramonette B. Serafica, 1997. "An Economic Analysis of the Service Area Scheme," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 34(1), pages 71-98, June.
    • Handle: RePEc:phs:prejrn:v:34:y:1997i:1:p:71-98
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    File URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/93/492
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    Cited by:

    1. Epictetus E. Patalinghug & Gilberto M. Llanto, 2005. "Competition Policy and Regulation in Power and Telecommunications," Microeconomics Working Papers 22048, East Asian Bureau of Economic Research.
    2. Patalinghug, Epictetus & Llanto, Gilberto M., 2005. "Competition Policy and Regulation in Power and Telecommunications," Discussion Papers DP 2005-18, Philippine Institute for Development Studies.

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