Business telephone traffic demand in Spain: 1980–1991, an econometric approach

Abstract

We use a theoretical model for the demand of telecommunication services to derive econometric models of the business demand for telephone traffic in Spain for the period 1980–1991. Using quarterly data, we estimate equations for toll traffic: local, long distance, national and international. We use cointegration to obtain long-run and short-run equations, estimated in two steps and jointly, in one step. Diagnostics are applied to the equations. Elasticities agree with previous findings and could be used for analyzing the revenue effects of changes in tariffs and medium term forecasting of traffic and revenues.