ABSTRACT

This paper revisits the question of whether fixed and mobile Internet expenditures are substitutable or complementary. We estimate a demand system using French household expenditure data to compute price elasticities for different categories of goods. The results indicate that fixed and mobile Internet expenditures are complementary in France. This complementarity effect increases with income level. We then develop a simple theoretical model showing that depending on the characteristics of fixed and mobile data tariffs, fixed and mobile Internet expenditures can exhibit non-substitutability or even complementarity.