Understanding European Union international message telephone services demand

This study provides a contemporary understanding of demand relations in Eur opean Union (EU) international message telephone service (IMTS) markets pri or to full liberalization at January 1 1998. Point-to-point demand equation s that relate IMTS demand to prices, income, population and distance are es timated on bilateral market data for ten EU countries from 1990 to 1995. Mo del estimates suggest price elasticities of outgoing and incoming demand be tween - 0.175 and - 0.456, and - 0.215 and - 0.674, respectively. These ela sticity estimates provide an empirical base from which to calculate welfare gains from the full deregulation of EU IMTS markets after 1998. (C) 2001 E lsevier Science BN. All rights reserved.