The Costs and Benefits of Do-Not-Call Regulations: A Comment on Beard and Abernethy's “Consumer Prices and the Federal Trade Commission's ‘Do-Not-Call’ Program”

Abstract

In a 2005 Journal of Public Policy & Marketing article, Beard and Abernethy estimate that the Federal Trade Commission's do-not-call regulations could plausibly be increasing the amount the average household pays for long-distance service by $19–$39 per year. However, their approach causes them to overstate the possible costs significantly. An expanded model and more plausible parameter values result in cost estimates of no more than $6–$22 per year. Furthermore, the benefits of the do-not-call regulations—the ability of consumers to avoid the interruptions caused by unwanted commercial telephone calls—suggest that the benefits of avoiding unwanted calls from long-distance providers are greater than the costs of the regulations if consumers value the time taken up by unwanted telemarketing calls at more than $8–$27 per hour.