An econometric analysis of New Zealand's toll-call demand

Abstract

This study is an exploratory examination of toll-call demand in New Zealand during the period 1967 to 1989. Toll-call theory, the sample data, and relevant market features that influence the data generating process are explained and then integrated into an econometric model using the Hendry methodology. The performance of the econometric model is assessed with respect to its statistical properties, prior empirical studies, and its consistency with the toll-call theory. This assessment suggests that the toll-call's context, in particular whether it is a commodity for consumption or a factor of production, has an economically significant influence on toll-call demand. Furthermore, the nature of an individual's community of interest, and hence toll-call demand, is found to vary with the toll-call haul distance.