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Feb 21

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Why Do We Still Receive Printed Phone Books?

In an age when most answers are found quickly online, I would think that the phone book has become obsolete except as an oversized paper weight, ripping material for circus strongmen, and perhaps as kindling for starting BBQs and camp fires. To my great surprise, however, no fewer than 34 states still require telephone companies to provide a copy of the white pages (a personal directory) to each of its customers every year. The remaining 16 states have created laws eliminating this requirement, though companies in these states are still required to furnish free copies upon request to customers. Why have so many states preserved this antiquated practice of distributing white pages by default rather than by request?

A 2008 Gallup poll found that only 11 percent of households relied upon the white pages, and this percentage has probably declined since. This low usage estimate stands in great contrast to the surprisingly large costs of producing and recycling the white pages. WhitePages, Inc. estimates that $17 million of tax-generated funds are spent yearly on recycling fees alone, and that’s when only less than 20% of consumers actually recycle their directories. The other 165,000 tons of white pages end up in landfills each year. Additionally, the phone companies must pay for the production of roughly 70 million copies per year, a cost that is likely passed on to consumers. I can’t think of any powerful lobby that wishes to preserve the mandatory distribution of the white pages; indeed, even WhitePages, Inc. publicly supports changing this practice.

Perhaps we can solve this puzzle by comparing those 16 states that abolished the mandatory distribution with those 34 that didn’t, and look for differences that might explain why the policy remains in place. Three differences across states come to mind. First, states with older populations who prefer the white pages over the internet might preserve the phone book laws. Second, states with a lower percent of people using the internet might keep the law on the books. Third, states with greater rural populations might be more likely to keep the phone book laws since urban directories are more likely to become outdated more quickly.

I subject each of these theories to empirical testing using a probit model, a statistical technique specially designed for cases like the present one when the dependent variable takes either a “yes” or “no” value. Based on the test, none of the three explanatory variables discussed above (percent over age 65, percent internet users, and percent urban) is significantly related to whether a particular state chooses to repeal its phone book laws.

In contrast, I find that state population is strongly and positively correlated with a repeal of the phone book laws using the same probit model described above. Put differently, large states are much more likely to repeal phone book laws. The reason for this relationship is a simple application of the logic of fixed costs. The costs of repealing the law, which consist of lobbying costs, use of scarce deliberation time within the legislature, research costs required to assess the repeal’s impact, etc., are relatively fixed across states. However, the benefit of the repeal—of not printing, recycling and disposing of millions of books— is highly variable across states and it grows with larger populations. For example, the cost of repealing this law in Wyoming is not that much lower than doing so in California. The number of legislators that must be lobbied is about the same in both states and both states have a limited number of bills they can pass into law. However, the total benefit of not printing phone books varies dramatically between the two states—phone companies will have to print 60 times more phone books in California than in Wyoming. Unsurprisingly, states where the benefit of the repeal is greatest relative to the costs (i.e. the largest states) are the ones that have repealed the obsolete phone book laws.

 

About the author

Benjamin Bohr

Benjamin is a manager at Fulcrum Financial Inquiry. He specializes in statistics and data analysis for use in high-stakes litigation, business valuations, and other financial matters.

Permanent link to this article: http://betweenthenumbers.net/2012/02/why-do-we-still-receive-printed-phone-books/

1 comment

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