Elasticity of demand for cellular phone network access in Malaysia
This study analyzes the elasticity of demand for cellular phone network access and the network effects in Malaysia. It uses quarterly data from 2003Q1 to 2011Q4 with 7 difference variables in two separate equations. The dependent variable is the penetration rate of cellular phone. From the analysi...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2016
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| Online Access: | http://journalarticle.ukm.my/10784/ http://journalarticle.ukm.my/10784/ http://journalarticle.ukm.my/10784/1/jeko_50%282%29-10.pdf |
| Summary: | This study analyzes the elasticity of demand for cellular phone network access and the network effects in Malaysia.
It uses quarterly data from 2003Q1 to 2011Q4 with 7 difference variables in two separate equations. The dependent
variable is the penetration rate of cellular phone. From the analysis, we found that the penetration rates of cellular
phone are strongly related to the factors highlighted in the study and all the variables are strongly significant. The
F-test also suggested that the entity Fixed Effects Model (FEM) is the appropriate model and more preferred for this
study. From the entity FEM analysis, all independent variables are significant. The price elasticity of demand, crossprice
elasticity and income elasticity are elastic. The result also shows that the fixed-line is complementary and luxury
goods to the cellular phone network in Malaysia and the networks externalities are strongly significant when we used
number of subscriber as a proxy. |
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