Working Paper Revision

The Increasing Deflationary Influence of Consumer Digital Access Services

Abstract: Consumer digital access services—internet, mobile phone, cable TV, and streaming—accounted for over 2 percent of U.S. household consumption in 2018. We construct prices for these services using direct measures of volume (data transmitted, talk time, and hours of programming). Our price index fell 12 percent per year from 1988 to 2018 while official prices moved up modestly. Using our digital services index, we estimate total personal consumption expenditure (PCE) prices have risen nearly 1/2 percentage point slower than the official index since 2008. Importantly, the spread between alternative and official PCE price inflation has increased noticeably over time.

Keywords: Price measurement; Consumer digital services; Innovation; Information and Communication Technology (ICT); National accounting;

JEL Classification: E31; L86; O33;

https://doi.org/10.17016/FEDS.2020.021r1

Bibliographic Information

Provider: Board of Governors of the Federal Reserve System (U.S.)

Part of Series: Finance and Economics Discussion Series

Publication Date: 2020-03-05

Number: 2020-021r1

Note: Revision

Related Works

• Working Paper Revision (2020-03-05) : You are here.
• Working Paper Original (2020-02-26) : The Increasing Deflationary Influence of Consumer Digital Access Services