Discounting telephone service: An examination of participation in the Lifeline Assistance Program using panel data

We examine the Lifeline Assistance Program to consider factors that cause people to not participate in a program that provides financial benefits. Using panel data we employ a feasible generalized least squares estimation in which the dependent variable is the logit of the Lifeline participation rate. Our unique database incorporates characteristics of the eligible population (rather than characteristics of the general population), to enable us to consider why many eligible beneficiaries do not enroll. We find incumbent telecommunications providers’ efforts to enroll beneficiaries to be statistically significant, and that owning one’s home and having a female head of household are associated with greater participation in the program while being elderly and having less education are associated with less participation. Additionally, we find that an increase in the local phone rate is associated with increased participation. Our findings are important for regulatory policy surrounding the Lifeline program and universal service programs generally.