Consumption Patterns and Self-selecting Tariffs

We describe and apply methods for empirically investigating the relation between consumption and tariff choice. These methods allow: (i) testing of alternative specifications for the relations of tariff choice and consumption patterns, (ii) estimation of parameters that provide information on the re...

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Bibliographic Details
Published in:The review of economics and statistics 1989-02, Vol.71 (1), p.62-73
Main Authors: Train, Kenneth E., Ben-Akiva, Moshe, Atherton, Terry
Format: Article
Language:English
Subjects:
Coefficients
Consistent estimators
Consumer behavior
Consumption
Cost estimation models
Economic models
Economic statistics
Economic theory
Fees
Mathematical analysis
Mathematical constants
Parametric models
Tariffs
Two part tariffs
Variable coefficients
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Summary:We describe and apply methods for empirically investigating the relation between consumption and tariff choice. These methods allow: (i) testing of alternative specifications for the relations of tariff choice and consumption patterns, (ii) estimation of parameters that provide information on the response of customers to marginal prices and fixed fees, and (iii) a determination of the extent to which the assumptions embodied in welfare results on self-selecting tariffs are valid in a particular setting. We apply the procedures to residential demand for local telephone service in an area where households are offered a choice among tariffs.
ISSN:0034-6535
1530-9142
DOI:10.2307/1928052