ANALISIS Y DISCUSION DE RESULTADOS

A study similar to that conducted for Florida’s counties was performed to examine the factors affecting participation in the Lifeline program nationwide. With a few exceptions, the same model was used in this study as in the Florida county-level study. As we note above, ideally an econometric study would use household level data to examine individual household participation decisions. As for the Florida county-level study, such micro-level data were unavailable for a nationwide study. Furthermore

82

Earlier versions of the Hauge, Jamison, and Jewell (2006a) study found that regional differences did not exist, so regional effects were omitted from the current version of the paper.

county-level data were unavailable on a national basis, so the U.S. study relied upon state-level data. Other differences between the Florida study and the U.S. study are noted below.83

For purposes of discussion, we divide explanatory factors into the following categories: (1) measures of the telecommunications and policy environment; (2) population characteristics;84 and (3) state differences that do not vary during the years of this study.

Measures of the telecommunications and policy environment. The study considered how Lifeline participation rates might be affected by the identity of the ILECs serving the state, prices for local telephone service, and the discount to local service prices provided by the Lifeline program. It found that customers of Verizon were less likely to participate in Lifeline than customers of other ILECs. Higher local phone prices were associated with greater Lifeline participation, suggesting that eligible households were willing and able to participate in the program to offset at least some of the effects of higher local telephone prices. Greater local service price discounts for the Lifeline program were also associated with higher Lifeline participation rates.85

Population characteristics. The study considered how certain demographic characteristics influenced Lifeline program participation; the broad categories of population traits in this context include education level, race and ethnicity, gender, and age. In contrast to the Florida county-level study, in this study certain demographic characteristics appeared to have a significant and positive effect on Lifeline program participation. Greater proportions of female heads of household were associated with higher participation rates. A higher percentage of Hispanic heads of household relative to other race and ethnic groups also had positive impacts on program participation, but the percentage of African-American or white heads of household had no statistically significant impact on participation. Consistent with the Florida study, higher education levels were associated with greater Lifeline program participation. However, states with higher median ages appeared to have lower participation rates, all other things being equal.

State-level differences treated as constant over time. The study considered certain characteristics of states that change slowly over time and might affect Lifeline program participation, namely the proportion of rural inhabitants, income levels, and the transient nature of the population. It found that states with higher urban populations seemed to have lower program participation. This might be due to available substitutes for

83

The authors of the U.S. study were unable to determine whether the Lifeline program participation numbers reported by other states were accurate. Given the similarity between the new Florida estimates and the FCC numbers for Florida, the FCC numbers for the other states were deemed to be reasonable to use. Note that California and Maine were deleted in the U.S. study because Hauge, Jamison, and Jewell (2006b) considered the numbers in these states to be disproportionately high and atypical.

84

The Florida study was able to isolate characteristics of low-income households. These data were unavailable for the nationwide study, so measures of traits of the general population by state were used. 85

Four states (Hawaii, Illinois, Louisiana, and New Hampshire) currently provide no state support to the program.

communication in an urban area, such as neighbors sharing phones, availability of affordable cell phone service, and the availability of public phones, but it is opposite from the effects of urban populations found in the Florida study. Like the Florida study, this study suggested that areas with greater concentrations of consumers who received government assistance were more likely to participate in the Lifeline program. Also in the U.S. study frequent relocation was negatively correlated with program participation.

As in the Florida county-level study, in the U.S. study certain possible explanations for program nonparticipation may not be captured by conventional measures. Appendix 2 Table 7 shows the variations that were not captured in the study as state effects. Florida’s actual participation rate was very close to the predicted participation rate, indicating that Florida’s participation rate is what one would expect, given the demographic and socioeconomic characteristics of Florida’s population and the state’s existing telecommunications policies. One could conclude that states with lower than predicted participation rates might consider improved outreach and sign-up processes (something this study did not measure),86 particularly for more urban areas with larger populations of less educated households.

86

The Burton and Mayo (2005) study found that outreach efforts had no statistical significance on participation in the Lifeline program.