Effects of increasing the subscriber line charge on total surplus and on GNP.

The purpose of this note is to provide rough estimates of the effects on total surplus and on the Gross National Product (GNP) of increases in the telephone subscriber-line charge in 1984, 1985, and 1986. Only direct effects are considered, that is, we do not try to take account of the effects of charges in the price of telephone service on prices and output quantities in other sectors of the economy. We find that the effects are large, and the effect on GNP is comparable to that estimated by Wharton Econometrics.