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The Estimation of the Economic Impact of Handset Subsidies Using Input-Output Tables

  • Informatization Policy
  • Abbr : 정보화정책
  • 2010, 17(2), pp.86-103
  • Publisher : NIA
  • Research Area : Social Science > Public Policy

Yongkyu Kim 1 Imho Kang 1

1한양대학교

Accredited

ABSTRACT

This paper computes the economic impact of handset subsidies using the recent Input-Output Tables and compares the results with other alternatives which telecommunications companies can choose. The first scenario is that telecommunications companies give handset subsidies to consumers and sales agents. The second is that the companies do not give the subsidies to them, but instead spend the same amount of subsidy on facility investment. The third is that the companies lower the prices of their mobile communications services and consumers spend the saved expenses on other goods and services. The result is that the production, value added, import, job, employment inducement coefficients of the first scenario is larger than those of the second and third scenarios. The reason is as follows. The handset subsidy results in the incentive to consumers for handset purchase or the incentive for sales agents to sell the telecommunication services of the companies. The former has larger production and import inducement effect, and the latter also has larger value-added, job, and employment inducement effect than those of other scenarios.

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