The growth of network computing : quality adjusted price changes for network servers
AbstractIn this paper we investigate the evolution of quality adjusted prices for servers motivated by two facts. First, the productivity acceleration in the US economy since the mid 1990s is closely linked to spread of information technology of which networked computing is a large component. Second, the growth of network computing itself has been fostered by the rapid growth in the quality and quantity of the network server market. Like Pakes’ (2003) analysis of the PC market, we show that our preferred version of the hedonic price index (“complete hybrid”) fell much more rapidly than the standard “matched model” price index (the hedonic index fell on average by about 30% per annum compared to 17% p.a. for the matched model). This difference is mainly due to the selection bias in the standard matched model price index due to the exit of obsolete models which would have had the fastest price falls.
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Bibliographic InfoPaper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 772.
Length: 31 pages
Date of creation: Jul 2005
Date of revision:
Hedonic prices; network servers; computers;
Other versions of this item:
- John Van Reenen, 2006. "The Growth of Network Computing: Quality-Adjusted Price Changes for Network Servers," Economic Journal, Royal Economic Society, vol. 116(509), pages F29-F44, 02.
- John Van Reenen, 2005. "The Growth of Network Computing: Quality Adjusted Price Changes for Network Servers," CEP Discussion Papers dp0702, Centre for Economic Performance, LSE.
- L4 - Industrial Organization - - Antitrust Issues and Policies
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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