The International Handbook of Telecommunications Economics, Volume I
Edited by Gary Madden
Chapter 3: Telecommunications productivity
3. Telecommunications productivity Laurits R. Christensen, Philip E. Schoech and Mark E. Meitzen INTRODUCTION This chapter presents a survey of total factor productivity (TFP) methods and studies for the telecommunications industry. TFP is the ratio of total output to total input, where total output consists of all the services provided by the industry and total input includes all resources used to provide those services. TFP is widely recognized as a comprehensive measure of productive eﬃciency. It is also an important component of price cap regulation. TFP growth can arise from a number of sources, including technical change (shifts in the production function), increasing returns to scale or density and market imperfections. Among these market imperfections are non-marginal cost pricing and factor market imperfections due to regulatory constraints, for example, rate of return regulation. The direct approach to measuring TFP is based on explicit measures of output and input. The measures of output and input are based on economic indexing techniques and, therefore, this approach is referred to as the indexing method. Complementing the indexing method is econometric cost analysis. By estimating the cost function, one can obtain estimates of the sources of TFP growth. In addition to the direct approach to measuring TFP, there have been some studies employing an indirect approach, which focuses on trends in output prices. This chapter is organized as follows. In the next section, we discuss methodological issues in measuring TFP. Next, we survey empirical studies of TFP for the telecommunications industry. We then...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.