The changing structure of cost and demand for the U.S. telecommunications industry

M. Ishaq Nadiri, Banani Nandi

    Research output: Contribution to journalArticle

    Abstract

    This paper formulates a multiproduct structural model to examine the evolution of the structures of production and demand and their dynamic interaction, over an extended period, 1935-1987, in the U.S. telecommunications industry. We estimate the degree of scale economies, cost elasticities, input price elasticities and the determinants of demand for outputs and for various factors of production. The contributions of the quasi-fixed inputs, such as R&D and physical capital, in the evolution of this industry are evaluated. A number of important issues like the changing characteristics of demand for and cost of local and toll services and the variation of price-cost margin over time are examined under different economic conditions, market structures and regulatory environments. We also analyze the effects of the 1984 divestiture of the Bell System on the cost structure, employment and capital formation of the U.S. telecommunications industry.

    Original languageEnglish (US)
    Pages (from-to)319-347
    Number of pages29
    JournalInformation Economics and Policy
    Volume9
    Issue number4
    DOIs
    StatePublished - Dec 1 1997

    Keywords

    • Cost of production
    • Rates of return
    • Telecommunications

    ASJC Scopus subject areas

    • Economics and Econometrics
    • Management, Monitoring, Policy and Law

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