test
Search publications, data, projects and authors

Free full text available

Thesis

English

ID: <

10670/1.1qhpk4

>

Where these data come from
Price indices for mobile telephone services in France: Application of the hedonic pricing method

Abstract

The French mobile market is characterised by continuous innovation, an increase in the quality of services brought about by technological progress, segmentation of supply and falls in prices as a result of price changes. The diversity of pricing formulas and types of services is additional to complex pricing and makes direct price comparison difficult. This research therefore focuses on the problem of measuring price variations in the mobile phone sector. In order to make a meaningful comparison of the prices of the tariff formulas, they must be compared on the basis of their intrinsic characteristics. From that point of view, the hedonic price method is the only method of compiling indices which allows a product to be regarded as a basket of characteristics of which it is composed. This work is thus part of the recent research into economic statistics to study the contribution of hedonic modelling to problems of adjusting price indices to changes in quality for complex products. Our work is presented in two parts. The first part analyses the economic theory of the numbers of indices and discusses the procedures for price adjustment on quality. It shows that the hedonic approach makes it possible to reformulate traditional indices, biased in relation to the constant utility microeconomic index, in the space of characteristics. These indices may therefore provide approximation to the theoretical index when changes in quality are taken into account. In the second part, following an empirical analysis of market characteristics, hedonic modelling of prices of mobile telephony services is developed. The hedonic price index corrected for changes in quality thus calculated shows that prices fell sharply in 1997. This fall in prices, which is characteristic of new products, has helped to boost demand and has been an important lever for the spread of mobile telephony. However, price levels stabilised from 1998 when the quality differentiation in the market is less pronounced in months. The hedonic approach has also proved to be an interesting tool to compare the pricing formulae of the same or different operators at a given point in time; the same formulae for different operators or at different times, taking into account both the characteristics of variety and quality. From this point of view, the hedonic approach can provide a reference price for the regulator, allowing it to see how operators position themselves in relation to hedonic prices. On the other hand, for operators, hedonic prices can be used as a competitive monitoring tool. Finally, for consumers, it is an indicator of comparison between different tariff formulas.

Your Feedback

Please give us your feedback and help us make GoTriple better.
Fill in our satisfaction questionnaire and tell us what you like about GoTriple!