The Relation Between Rents and Incomes, and the Distribution of Rental Values

Many parts of telephone plant, such as central office buildings and equipment, conduits, underground and aerial cable at the time of installation must have the capacity to handle not only the immediate demand for telephone service, but also to take care of growth for a number of years to come. In order to engineer such items of telephone plant economically it is necessary to know in advance as accurately as possible what the demand for telephone service will be five, ten, or twenty years in the future. Forecasts of the future market are very necessary for plant engineering, operating plans, rate treatment, and other purposes, in multi-central office cities. In such cities detailed estimates are made of the market some twenty years ahead and of its telephone development under stated rate conditions. Such estimates are called commercial surveys, and they involve a study of the various factors which, in the course of events, will be likely to control the industrial, commercial and residential development of the city concerned. In the course of such a survey, a rental classification of all families is obtained and at the same time a record is made of existing telephone service in each rental class. The rent data of this article have been gathered in representative large cities throughout the country and the results as here set forth are being used together with many other kinds of data to guide the engineering of future additions to the plant of the Bell Telephone System. In general the income of a family is an index of the market it creates for various commodities including telephone service.