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.
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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 - - 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
- 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)
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