DATA ANALYTICS
Telecommunication Industry
DESCRIPTION OF PROJECT
PROJECT/PAPER: “Cost Structure, Subadditivity Test and Cost Complementarities in The Telecommunications Industry: An Empirical Analysis” Working paper (Dissertation Article-University of Southern California (USC).
This paper/project reexamines the natural monopoly and cost complementarities in the U.S. telecommunications market using a new unbalanced panel data set that covers the period between 1992 and 2001. The model includes unobserved heterogeneity that is correlated to some explanatory variables. I use a dynamic panel data approach to estimate the total cost function of the local exchange carriers. The estimated cost function is then used in the test for subadditivity and cost complementarities, which are two characteristics of the cost structure. I find that the local exchange carriers’ cost appears to be subadditive, meaning that breaking up the local exchange carrier is not efficient in term of cost saving. The regulated incumbent local exchange carriers are natural monopolies. The second result concerns the cost complementarities issue. I find that the cost generated by jointly producing local and toll calls is on average lower than not producing them jointly. This indicates the presence of cost complementarities.
Keywords: Dynamic Panel Data, First Difference Instrument variable (FDIV), Difference GMM, Subadditivity test, Cost Complementarities.
http://digitallibrary.usc.edu/cdm/ref/collection/p15799coll127/id/10561
PRINCIPALS: Torna Omar Soro, USC – Los Angeles, California
COUNTRIES: USA
SPONSORS: USC (University of Southern California: Los Angeles), Economics Department
DATES: 9/2000 –12/2006
DESCRIPTION OF PROJECT
PROJECT/PAPER: “Structural Regulation, Scale Economies and Merger in the Telecommunications Industry: An Empirical Analysis” Working paper (Dissertation article-University of Southern California (USC).
This paper estimates economies of scale in the U.S Telecommunication industry using a semiparametric variant of the translog cost function. We use a new panel data set on U.S telecommunication industry for the period between 1992 and 2001 (before and after the Telecommunication act 96). Our result indicates the presence scale economies in the telecommunication industry in general and in the local exchange carrier in particular.
KEYWORDS: Structural Regulation, Scale Economies, Semiparametrics Estimation, Kernel, Robinson
method, Panel Data, bootstrap
http://digitallibrary.usc.edu/cdm/ref/collection/p15799coll127/id/10561
PRINCIPALS: Torna Omar Soro, USC – Los Angeles, California
COUNTRIES: USA
SPONSORS: USC (University of Southern California: Los Angeles), Economics Department
DATES: 9/2000 –12/2006
DESCRIPTION OF PROJECT
PROJECT/PAPER: “Comparison of Regulatory Regimes in the U.S. Telecommunications Market: An Empirical Analysis”. Working paper (Dissertation article-University of Southern California (USC).
This paper introduces a new empirical approach to study the regulatory mechanisms in the telecommunications market. The method used in our study is based on generated data from a computer modeling of the local telephone network instead of the traditional approach focusing on real data. We assumed that the local exchange carrier industry possesses the characteristics of a monopoly. We used generated data from a computer model of the local telephone network to compare different regulatory mechanisms. For smoothing purposes, we estimated different cost functions from the generated data. Using the calibration technique(with mathematica), our first result shows the good performance of incentive regulation compared to traditional regulation mechanisms (cost plus regulation). More than 33 percent of the welfare loss associated with traditional regulation can be recovered by switching to incentive regulation. Within incentive regulation, the result shows the good performance of Laffont-Tirole’s (1986) model and Baron Myerson’s (1985) model compared to price cap. This rank does not change when moving from a disutility function of a quadratric form to an exponential form. Our last result shows that, by using Laffont-Tirole’s model as an indication of good auditing, it performs better than Baron-Myerson’s model. When using Laffont-Tirole’s model, the regulator can recover on average 15.98 percent of the loss associated with the Baron-Myerson’s model. No matter which parametric cost function we used for fitting the data, the rank of the different regulatory regimes does not change. Following the construction of the University of the Southern California computer science software cost estimation model (cocomo2), we developed in the last part of our paper an alternative mapping for the arguments (effort and efficiency) of the regulatory cost function.
Keywords and Phrases: Engineering Telecommunication Cost proxy model (HCPM, LECOM),
Cost plus regulation, Software cost estimation, Price cap regulation, Regulation model with ex-post cost
observability (Laffont Tirole), Regulation model with no cost observability (Baron-Myerson), Parametric estimation.
http://digitallibrary.usc.edu/cdm/ref/collection/p15799coll127/id/10561
PRINCIPALS: Torna Omar Soro, USC – Los Angeles, California
COUNTRIES: USA
SPONSORS: USC (University of Southern California: Los Angeles), Economics Department
DATES: 9/2000 –12/2006
DESCRIPTION OF PROJECT
PROJECT/PAPER:“Network Externalities in the telecommunication industry in Cote D’Ivoire: An application using panel data analysis”. The project was funded by the African Development Bank (AfDB) and run by CREMIDE.
PRINCIPALS: Torna Omar Soro (CREMIDE-Cote D’Ivoire)
COUNTRIES: Cote D’Ivoire / Ivory Coast
SPONSORS: AfDB(African Development Bank)
DATES: 1998 - 2000