Search Results
Working Paper
The Increasing Deflationary Influence of Consumer Digital Access Services
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 ...
Discussion Paper
Own-Account IT Equipment Investment
This note considers a puzzle: why has information technology (IT) equipment investment in the National income and Product Accounts (NIPAs) been so weak since 2007 at the same time that financial reports indicate massive increases in capital expenditures by IT service companies?
Working Paper
Price and quality dispersion in an offshoring market: evidence from semiconductor production services
We study cross-country differences in price and quality in the market for semiconductor wafer manufacturing services. Using a proprietary transaction-level data set, we document i) substantial constant-quality price differences across suppliers, and ii) shifts toward lower priced suppliers. Chinese producers on average charged 17% less than leading Taiwanese producers for otherwise identical products and increased their market share by 14.7 percentage points. The extent of cross-country price dispersion is also diminishing over a product's life. A model with costs of switching suppliers is ...
Working Paper
Accounting for Innovations in Consumer Digital Services: IT still matters
This paper develops a framework for measuring digital services in the face of ongoing innovations in the delivery of content to consumers. We capture what Brynjolfsson and Saunders (2009) call "free goods" as the capital services generated by connected consumers' stocks of IT digital goods; this service flow augments the existing measure of personal consumption in GDP. Its value is determined by the intensity with which households use their IT capital to consume content delivered over networks, and its volume depends on the quality of the IT capital. Consumers pay for delivery services, ...
Discussion Paper
The Mysterious Cross-Country Dispersion in Mobile Phone Price Trends
Mobile phones have been central to ICT innovation since the introduction of the smartphone and constant-quality prices are a barometer of their economic impact. Official consumer price indices (CPIs) indicate that impact differs wildly across countries: For the 2008-2018 period, average annual rates of mobile phone inflation range from no change to a 25 percent decline among 12 key countries examined in this paper. Although evidence indicates certain fundamental factors are at play, mis-measurement may lead the spread in rates to be overstated. Examination of methods employed in CPI ...
Working Paper
The Digital Economy and Productivity
After reviewing the state of digitalization---the use of digital information technology (IT) throughout the economy---we consider the slippery concept of a distinct digital economy and efforts to record it in national accounts. We then anchor the digital economy in a growth accounting framework, augmenting the conventional measure of the IT contribution to productivity---innovation in the production of IT capital plus labor-saving use of IT throughout the economy---with the contribution from the digital platforms that help users navigate the sprawling information landscape. We discuss the ...
Discussion Paper
The Increasing Deflationary Impact of Consumer Digital Access Services
Although U.S. consumer price statistics are prone to upward bias, they remain useful if imperfect accounting has a known and stable effect (Boskin et al., 1998; Moulton, 2018). For example, monetary authorities may set a target for
Working Paper
Getting Smart About Phones : New Price Indexes and the Allocation of Spending Between Devices and Services Plans in Personal Consumption Expenditures
This paper addresses two measurement issues for mobile phones. First, we develop a new mobile phone price index using hedonic quality-adjusted prices for smartphones and a matched-model index for feature phones. Our index falls at an average annual rate of 17 percent during 2010-2018, close to the rate of decline in the price index used in the GDP Accounts. Given relatively flat average prices over this period, our index points to substantial quality improvement. Second, we propose a methodology to disentangle purchases of phones and wireless services when they are bundled together as part of ...
Discussion Paper
Prices and Depreciation in the Market for Tablet Computers
Spurred by advances in electronic miniaturization and power efficiency, lightweight, powerful and inexpensive tablet computers entered the mass market in significant volumes in 2010. Since that time, sales of tablet computers have increased to account for over half of personal computer (PC) units sold worldwide.
Working Paper
The Increasing Deflationary Influence of Consumer Digital Access Services
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 ...