Measuring the Welfare Gain from Personal Computers: A Macroeconomic Approach
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.
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 University of Rochester - Center for Economic Research (RCER) in its series RCER Working Papers with number 559.
Length: 25 pages
Date of creation: Jan 2011
Date of revision:
Contact details of provider:
Postal: University of Rochester, Center for Economic Research, Department of Economics, Harkness 231 Rochester, New York 14627 U.S.A.
Compensating Variation; Computers; Electricity; Equivalent Variation; Technological Progress; Tornqvist Price Index; Welfare Gain.;
Other versions of this item:
- Jeremy Greenwood & Karen A. Kopecky, 2007. "Measuring the Welfare Gain from Personal Computers: A Macroeconomic Approach," NBER Working Papers 13592, National Bureau of Economic Research, Inc.
- Karen A. Kopecky & Jeremy Greenwood, 2011. "Measuring the welfare gain from personal computers: a macroeconomic approach," Working Paper 2011-05, Federal Reserve Bank of Atlanta.
- E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
- E21 - Macroeconomics and Monetary Economics - - 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
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-12 (All new papers)
- NEP-MAC-2011-02-12 (Macroeconomics)
- NEP-MIC-2011-02-12 (Microeconomics)
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.:
- Jonathan Hersh & Joachim Voth, 2009.
"Sweet diversity: Colonial goods and the rise of European living standards after 1492,"
Economics Working Papers
1163, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2011.
- Hersh, Jonathan & Voth, Hans-Joachim, 2009. "Sweet Diversity: Colonial Goods and the Rise of European Living Standards after 1492," CEPR Discussion Papers 7386, C.E.P.R. Discussion Papers.
- Jerry A. Hausman, 1996.
"Valuation of New Goods under Perfect and Imperfect Competition,"
in: The Economics of New Goods, pages 207-248
National Bureau of Economic Research, Inc.
- Hausman, J.A., 1994. "Valuation of New Goods Under Perfect and Imperfect Competition," Working papers 94-21, Massachusetts Institute of Technology (MIT), Department of Economics.
- Jerry A. Hausman, 1994. "Valuation of New Goods under Perfect and Imperfect Competition," NBER Working Papers 4970, National Bureau of Economic Research, Inc.
- Austan Goolsbee & Peter J. Klenow, 2006.
"Valuing Consumer Products by the Time Spent Using Them: An Application to the Internet,"
American Economic Review,
American Economic Association, vol. 96(2), pages 108-113, May.
- Austan Goolsbee & Peter J. Klenow, 2006. "Valuing Consumer Products by the Time Spent Using Them: An Application to the Internet," Discussion Papers 05-010, Stanford Institute for Economic Policy Research.
- Austan Goolsbee & Peter J. Klenow, 2006. "Valuing Consumer Products by the Time Spent Using Them: An Application to the Internet," NBER Working Papers 11995, National Bureau of Economic Research, Inc.
- Rebelo, Sergio, 1992.
"Growth in open economies,"
Carnegie-Rochester Conference Series on Public Policy,
Elsevier, vol. 36(1), pages 5-46, July.
- Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 1997.
"Beyond Balanced Growth,"
NBER Working Papers
6159, National Bureau of Economic Research, Inc.
- Kongsamut, P. & Rebelo, S. & Xie, D., 1997. "Beyong Balanced Growth," RCER Working Papers 438, University of Rochester - Center for Economic Research (RCER).
- Kongsamut, Piyabha & Rebelo, Sérgio & Xie, Danyang, 1997. "Beyond Balanced Growth," CEPR Discussion Papers 1693, C.E.P.R. Discussion Papers.
- Sergio Rebelo & Piyabha Kongsamut & Danyang Xie, 2001. "Beyond Balanced Growth," IMF Working Papers 01/85, International Monetary Fund.
- Austan Goolsbee & Amil Petrin, 2004. "The Consumer Gains from Direct Broadcast Satellites and the Competition with Cable TV," Econometrica, Econometric Society, vol. 72(2), pages 351-381, 03.
- Chatterjee, Satyajit, 1994. "Transitional dynamics and the distribution of wealth in a neoclassical growth model," Journal of Public Economics, Elsevier, vol. 54(1), pages 97-119, May.
- Jeremy Greenwood & Gokce Uysal, 2004.
"New Goods and the Transition to a New Economy,"
NBER Working Papers
10793, National Bureau of Economic Research, Inc.
- Amil Petrin, 2002. "Quantifying the Benefits of New Products: The Case of the Minivan," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 705-729, August.
- Jerry Hausman, 1997.
"Cellular Telephone, New Products and the CPI,"
NBER Working Papers
5982, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gabriel Mihalache).
If references are entirely missing, you can add them using this form.