Measuring the Growth from Better and Better Goods
AbstractUsing micro CPI data, I show that much of inflation for durable goods since 1988 reflects, not increases in price for a given set of products, but rather shifts to a newer set of product models that display higher prices. I examine how these price differences should be divided between quality growth and price inflation based on how consumer spending responds to product substitutions. For all goods examined (cars, other vehicles, televisions, and other consumer electronics), buying shifts to the newer models despite their higher prices. This suggests that quality growth for durables has averaged at least 5.8% per year, more than double the rate implied by CPI measurement.
Download InfoIf 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.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10606.
Date of creation: Jul 2004
Date of revision:
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-07-04 (All new papers)
- NEP-DEV-2004-07-04 (Development)
- NEP-INO-2004-07-04 (Innovation)
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.:
- Rochet, Jean-Charles & Stole, Lars A, 2002.
"Nonlinear Pricing with Random Participation,"
Review of Economic Studies,
Wiley Blackwell, vol. 69(1), pages 277-311, January.
- Jack E. Triplett, 1997. "Measuring consumption: the post-1973 slowdown and the research issues," Review, Federal Reserve Bank of St. Louis, issue May, pages 9-42.
- Robert J. Gordon, 1990. "The Measurement of Durable Goods Prices," NBER Books, National Bureau of Economic Research, Inc, number gord90-1, December.
- Genesove, David, 1993. "Adverse Selection in the Wholesale Used Car Market," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 644-65, August.
- Steven Berry & Ariel Pakes, 2007. "The Pure Characteristics Demand Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(4), pages 1193-1225, November.
- Marc P. Giannoni & Jean Boivin, 2005.
"DSGE Models in a Data-Rich Environment,"
Computing in Economics and Finance 2005
431, Society for Computational Economics.
- Jean Boivin & Marc Giannoni, 2006. "DSGE Models in a Data-Rich Environment," NBER Technical Working Papers 0332, National Bureau of Economic Research, Inc.
- Boivin, J. & Giannoni, M., 2007. "DSGE Models in a Data-Rich Environment," Working papers 162, Banque de France.
- Jean Boivin & Marc Giannoni, 2006. "DSGE Models in a Data-Rich Environment," NBER Working Papers 12772, National Bureau of Economic Research, Inc.
- Sergio Rebelo & Ariel Burstein & Martin Eichenbaum, 2004.
"Large Devaluations and the Real Exchange Rate,"
2004 Meeting Papers
137, Society for Economic Dynamics.
- Ariel Burstein & Martin Eichenbaum & Sergio Rebelo, 2004. "Large Devaluations and the Real Exchange Rate," RCER Working Papers 513, University of Rochester - Center for Economic Research (RCER).
- Ariel Burstein & Martin Eichenbaum & Sergio Rebelo, 2004. "Large Devaluations and the Real Exchange Rate," NBER Working Papers 10986, National Bureau of Economic Research, Inc.
- Burstein, Ariel Tomas & Eichenbaum, Martin & Rebelo, Sérgio, 2004. "Large Devaluations and the Real Exchange Rate," CEPR Discussion Papers 4810, C.E.P.R. Discussion Papers.
- Greenwood, Jeremy & Krusell, Per, 2007. "Growth accounting with investment-specific technological progress: A discussion of two approaches," Journal of Monetary Economics, Elsevier, vol. 54(4), pages 1300-1310, May.
- Frank R. Lichtenberg & Gautier Duflos, 2008. "Pharmaceutical innovation and the longevity of Australians: a first look," NBER Working Papers 14009, National Bureau of Economic Research, Inc.
- Jeremy Greenwood & Gokce Uysal, 2004.
"New Goods and the Transition to a New Economy,"
NBER Working Papers
10793, National Bureau of Economic Research, Inc.
- Christian Broda & David E. Weinstein, 2007.
"Product Creation and Destruction: Evidence and Price Implications,"
NBER Working Papers
13041, National Bureau of Economic Research, Inc.
- Christian Broda & David E. Weinstein, 2010. "Product Creation and Destruction: Evidence and Price Implications," American Economic Review, American Economic Association, vol. 100(3), pages 691-723, June.
- Carol Corrado & Wendy Dunn & Maria Otoo, 2006. "Incentives and prices for motor vehicles: what has been happening in recent years?," Finance and Economics Discussion Series 2006-09, Board of Governors of the Federal Reserve System (U.S.).
- Frank R. Lichtenberg, 2009.
"The Quality of Medical Care, Behavioral Risk Factors, and Longevity Growth,"
NBER Working Papers
15068, National Bureau of Economic Research, Inc.
- Frank Lichtenberg, 2011. "The quality of medical care, behavioral risk factors, and longevity growth," International Journal of Health Care Finance and Economics, Springer, vol. 11(1), pages 1-34, March.
- Frank R. Lichtenberg, 2006. "The Impact of New Laboratory Procedures and Other Medical Innovations on the Health of Americans, 1990-2003: Evidence from Longitudinal, Disease-Level Data," NBER Working Papers 12120, National Bureau of Economic Research, Inc.
- Juan Carlos Hallak & Peter K. Schott, 2011.
"Estimating Cross-Country Differences in Product Quality,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 126(1), pages 417-474.
- Juan Carlos Hallak & Peter K. Schott, 2008. "Estimating Cross-Country Differences in Product Quality," NBER Working Papers 13807, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.