Research On Spatial Econometrics Of Price Discrimination Of Post And Telecommunication Industry In China

With the development of the competition system, the post andtelecommunication industry forms the pattern of monopolistic competition. Undersuch circumstance, on the one hand, the price regulation on post andtelecommunication industry has relaxed. On the other hand, the operators in theindustry achieve more benefits with the price discrimination. Previous studies alwaysuse the qualitative approach to research the price discrimination and its effects. Whileless quantitative method is used to measure the price discrimination. In addition,previous studies don't introduce the spatial econometrics theory into the research ofprice discrimination of the post and telecommunication industry.Consequently, this paper tries to accomplish four tasks as follows. Firstly, thepaper designs the Fixed Effects Model to measure the price discrimination and itstrends in the post and telecommunication industry. Secondly, the analysis of thepack-making mechanism in China's mobile can prove the accurate of the pricediscrimination measured by the Fixed Effects Model. Thirdly, the introduction of thespatial econometrics theory into the study can indicate the spatial pattern of pricediscrimination. Finally, we analyze the relationship between the price discriminationand the per capita income or the market power in the post and telecommunicationindustry.The conclusions are as follows. Firstly, based on the Fixed Effects Model, theprice discrimination by region can be measured. And it indicates that the degree of theprice discrimination decreases in the whole industry and the telecom industry, whilethe degree of the price discrimination increases in the postal industry. Furthermore, the degree of price discrimination differs from various regions which means there isunbalanced growth in the post and telecommunication industry. Secondly, the analysisof the pack-making mechanism in China's mobile shows the degree of the pricediscrimination is significant higher in the eastern and western than that in the middleand northeast regions. Thirdly, with spatial econometrics theory, the paper finds thatthe price discrimination by region has significantly and increasingly positive spatialrelationship which indicates that the degree of the price discrimination is influencedby the price policy in the adjacent area. Moreover, regard to the local spatialcorrelation, the overall industry exhibits two distributions, such as the high-highdistribution and low-low distribution. In the telecom industry, the high-highdistribution spreads in the eastern region and the low-low distribution exists in thewestern area while the distribution in the postal industry is the opposite. Thirdly, thespatial econometric models (SEM and SLM) works better to estimate the relationshipbetween the price discrimination and the per capita income by region than LeastSquare Method. And the outcome from the spatial econometric models argues there ispositive relationship between the price discrimination and the per capita income byregion in the post and telecommunication industry. Last but not least, the marketpower in the industry makes positive effects on the price discrimination.