NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Changing Structure of Cost and Demand for the U.S. Telecommunications Industry

M. Ishaq Nadiri, Banani Nandi

NBER Working Paper No. 5820
Issued in November 1996
NBER Program(s):   PR

This paper formulates a multiproduct structural model to examine the evolution of the structure of production and demand and the dynamic interaction between the two in the context of the U.S. telecommunications industry over an extended period, from 1935 to 1987. We estimate the degree of scale economies, cost elasticities, input price elasticities and the determinants of output demand. The contribution of the quasi-fixed inputs, such as R&D and physical capital, in the evolution of this industry are examined. Using our analytical framework and a long sample period, we examine a number of important issues such as the stability of the cost and demand structure over time, the changing characteristics of demand for local and toll services and the variation of price-cost margin over time under different economic conditions, market structures and regulatory environments. Use of this approach makes it possible to analyze the effects of the 1984 divestiture of the Bell System on the cost structure, employment and capital formation of the telecommunications industry in the U.S.

download in pdf format
   (1800 K)

email paper

This paper is available as PDF (1800 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w5820

Published: IEP, Vol. 9, no. 4 (December 1997): 319-347. Published as "Technical Change, Markup, Divestiture and Productivity Growth in the U.S. Telecommunications Industry", Review of Economics and Statistics, Vol. 18, no. 3 (August 1999).

Users who downloaded this paper also downloaded these:
Bernstein and Mamuneas w13269 Irreversible Investment, Capital Costs and Productivity Growth: Implications for Telecommunications
Olley and Pakes w3977 The Dynamics of Productivity in the Telecommunications Equipment Industry
Fuss and Waverman Regulation and the Multiproduct Firm: The Case of Telecommunications in Canada
Hausman w6260 Taxation by Telecommunications Regulation
Greenstein and Mazzeo w9761 Differentiation Strategy and Market Deregulation: Local Telecommunication Entry in the Late 1990s
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us