The B.E. Journal of Economic Analysis & Policy
Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra
Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Friebel, Guido / Mendola, Mariapia / Requate, Till / Tsui, Kevin / Wichardt, Philipp / Zulehner, Christine
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Most Downloaded Articles
- The Inheritance of Educational Inequality: International Comparisons and Fifty-Year Trends by Hertz, Tom/ Jayasundera, Tamara/ Piraino, Patrizio/ Selcuk, Sibel/ Smith, Nicole and Verashchagina, Alina
- IQ and Family Background: Are Associations Strong or Weak? by Björklund, Anders/ Hederos Eriksson, Karin and Jäntti, Markus
- Do Rising Top Income Shares Affect the Incomes or Earnings of Low and Middle-Income Families? by Thompson, Jeffrey P. and Leight, Elias
- Therapeutic Equivalence and the Generic Competition Paradox by Nabin, Munirul Haque/ Mohan, Vijay/ Nicholas, Aaron and Sgro, Pasquale M.
- Before and After: Gender Transitions, Human Capital, and Workplace Experiences by Schilt, Kristen and Wiswall, Matthew
Why Do the Poor and the Less-Educated Pay More for Long-Distance Calls?
Citation Information: Contributions in Economic Analysis & Policy. Volume 3, Issue 1, ISSN (Online) 1538-0645, DOI: 10.2202/1538-0645.1210, April 2004
- Published Online:
The benefits of competition among the long-distance interexchange carriers (IXCs) are not realized equally by all their customers. Despite the declines in rates under the discount plans, we document that basic message toll service (MTS) rates have been rising for several years. We show that poorer and less educated customers pay more than better educated and more affluent customers. We suspect that the reason for this correlation is that they are more apt to pay the MTS rates or other high rates, and we present some preliminary evidence that this tendency explains the correlation that we find. We also present evidence that the payment differences exist even after controlling for usage. These findings are significant because it seems likely to us that these two patterns (rising MTS rates and higher payments by the poor and the less educated) will each be ameliorated by the entry of the regional Bell operating companies (RBOCs) into long-distance markets—a state-by-state regulatory process that was nearly complete as of the beginning of 2004.