Measuring the Welfare Gain from Personal Computers
AbstractThe welfare gain to consumers from the introduction of personal computers is estimated here. A simple model of consumer demand is formulated that uses a slightly modified version of standard preferences. The modification permits marginal utility, and hence total utility, to be finite when the consumption of computers is zero. This implies that the good won't be consumed at a high enough price. It also bounds the consumer surplus derived from the product. The model is calibrated/estimated using standard national income and product account data. The welfare gain from the introduction of personal computers is in the range of 2 to 3 percent of consumption expenditure. Economic Inquiry, forthcoming.
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Bibliographic InfoPaper provided by Economie d'Avant Garde in its series Economie d'Avant Garde Research Reports with number 15.
Length: 13 pages
Date of creation: Sep 2007
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Compensating Variation; Computers; Electricity; Equivalent Variation; Fisher Ideal Price Index; New Goods; Technological Progress; Tornqvist Price Index; Welfare Gain;
Other versions of this item:
- Jeremy Greenwood & Karen A. Kopecky, 2013. "Measuring The Welfare Gain From Personal Computers," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 336-347, 01.
- Karen A. Kopecky & Jeremy Greenwood, 2008. "Measuring the Welfare Gain from Personal Computers," 2008 Meeting Papers 491, Society for Economic Dynamics.
- E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
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