A Hedonic Analysis of Consumer Demand for Mobile Value-Added Services: A Structural Equation Modelling Approach

A large part of valued-added mobile services are free for consumers' use. To enjoy these services, however, consumers have to pay for the mobile phone handsets, and for the mobile Internet as well. This study, therefore, aims to estimate the implicit price consumers are willing to pay for these free mobile services, and for the attributes of mobile devices as well. The study applies hedonic pricing models with structural equation modeling (SEM) approach to estimating the coefficients of the variables on mobile phone and service usage. Then it employs data on 296 mobile phone users collected in 2012 for model estimation. The estimation results show that there are seven attributes which determine the price consumers pay for the mobile phone handsets and another eight attributes on the usage of the value-added mobile services which determine the price for the access to the mobile network.