Cross-sectional analysis of residential telephone subscription in Canada using 1994 data

Abstract This paper presents the results of a cross-sectional analysis of residential telephone subscription in Canada using a sample of 37,000 households. A generalized extreme value model is used to relate the probability of subscription to zero, one, or more than one line to socio-economic and demographic factors, including price. The model results corroborate previous results which show that access to residential telephone service in Canada is highly price inelastic. At 1994 prices and predicted subscription rates it is found that the demand for an additional line is much more price responsive than the demand for access, but is also price inelastic.