Advanced Search
MyIDEAS: Login to save this paper or follow this series

Do hedonic price indexes change history? The case of electrification

Contents:

Author Info

  • Edquist, Harald

    ()
    (Dept. of Economic Statistics, Stockholm School of Economics)

Abstract

Rapid price decreases for ICT-products in the 1990s have been largely attributed to the introduction of hedonic price indexes. Would hedonic price indexing also have large effects on measured price and productivity during earlier technological breakthroughs? This paper investigates the impact of hedonic and matched model methods on historical data for electric motors in Sweden 1900–35. The results show that during the productivity boom of the 1920s, current prices for electric motors decreased by 13.2 and 12.2 percent per year depending on whether hedonic or matched model price indexes were used. This indicates high productivity growth in the industry producing electric motors in 1920–29. In contrast to Sweden, the US annual total factor productivity growth was only, according to current best estimates, 3.5 percent in Electric machinery compared to 5.3 percent in manufacturing in 1920–29. However, hedonic price indexes were not used to calculate US productivity. Finally, it is shown that the price decreases for electric motors in the 1920s were not on par with the price decreases for ICT-equipment in the 1990s, even if hedonic indexing is used in both cases.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://swopec.hhs.se/hastef/papers/hastef0586.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 586.

as in new window
Length: 36 pages
Date of creation: 16 Feb 2005
Date of revision: 28 Feb 2005
Handle: RePEc:hhs:hastef:0586

Contact details of provider:
Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Phone: +46-(0)8-736 90 00
Fax: +46-(0)8-31 01 57
Email:
Web page: http://www.hhs.se/
More information through EDIRC

Related research

Keywords: Hedonic price index; Electric motor; Productivity growth; Electrification; ICT revolution; Productivity growth; General Purpose Technologies; Innovation;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Daniel M. G. Raff & Manuel Trajtenberg, 1996. "Quality-Adjusted Prices for the American Automobile Industry: 1906-1940," NBER Chapters, in: The Economics of New Goods, pages 71-108 National Bureau of Economic Research, Inc.
  2. David, P.A., 1989. "Computer And Dynamo: The Modern Productivity Paradox In A Not-Too Distant Mirror," The Warwick Economics Research Paper Series (TWERPS) 339, University of Warwick, Department of Economics.
  3. Henrekson, Magnus & Edquist, Harald, 2006. "Technological Breakthroughs and Productivity Growth," Working Paper Series 665, Research Institute of Industrial Economics.
  4. Nicholas Crafts, 2004. "Steam as a general purpose technology: A growth accounting perspective," Economic Journal, Royal Economic Society, vol. 114(495), pages 338-351, 04.
  5. Edquist, Harald, 2004. "The Swedish ICT Miracle - Myth or Reality," Working Paper Series in Economics and Finance 556, Stockholm School of Economics, revised 29 Mar 2004.
  6. Gordon, Robert J., 1990. "The Measurement of Durable Goods Prices," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226304557, April.
  7. Stefano Scarpetta & Andrea Bassanini & Dirk Pilat & Paul Schreyer, 2000. "Economic Growth in the OECD Area: Recent Trends at the Aggregate and Sectoral Level," OECD Economics Department Working Papers 248, OECD Publishing.
  8. Trajtenberg, M. & Bresnahan, T.F., 1992. "General Purpose Technologies: "Engines of Growth"," Papers 16-92, Tel Aviv.
  9. Gordon, Robert J, 2000. "Does the 'New Economy' Measure up to the Great Inventions of the Past?," CEPR Discussion Papers 2607, C.E.P.R. Discussion Papers.
  10. Crafts, Nicholas, 2004. "Productivity Growth in the Industrial Revolution: A New Growth Accounting Perspective," The Journal of Economic History, Cambridge University Press, vol. 64(02), pages 521-535, June.
  11. Peter L. Rousseau & Boyan Jovanovic, 2004. "General Purpose Technologies," 2004 Meeting Papers 103, Society for Economic Dynamics.
  12. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
  13. David, Paul A, 1990. "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," American Economic Review, American Economic Association, vol. 80(2), pages 355-61, May.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Edquist, Harald & Henrekson, Magnus, 2004. "Technological Breakthroughs and Productivity Growth," Working Paper Series in Economics and Finance 0562, Stockholm School of Economics, revised 04 Apr 2005.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hhs:hastef:0586. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Helena Lundin).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.