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Seasonality, consumer heterogeneity and price indexes: the case of prepackaged software

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Abstract

This paper measures constant-quality price change for prepackaged software in the US using detailed and comprehensive scanner data. Because there is a large sales surge over the winter-holiday, it is important to account for seasonal variation. Using a novel approach to constructing a seasonally-adjusted cost-of-living price index that explicitly accounts for consumer heterogeneity, I find that from 1997 to 2003 constant-quality software prices declined at an average 15.9% at an annual rate. As a point of comparison, the Bureau of Labor Statistics reports average annual price declines of only 7.7% for prepackaged software. Copyright Springer Science+Business Media, LLC 2013

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  • Adam Copeland, 2013. "Seasonality, consumer heterogeneity and price indexes: the case of prepackaged software," Journal of Productivity Analysis, Springer, vol. 39(1), pages 47-59, February.
    • Handle: RePEc:kap:jproda:v:39:y:2013:i:1:p:47-59
    DOI: 10.1007/s11123-012-0266-2
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    Cited by:

    1. Erich H. Strassner & David B. Wasshausen, 2017. "BEA Deflators for Information and Communications Technology Goods and Services: Historical Analysis and Future Plans," NBER Chapters, in: Measuring and Accounting for Innovation in the Twenty-First Century, pages 553-572, National Bureau of Economic Research, Inc.
    2. repec:aei:rpaper:37301 is not listed on IDEAS
    3. David M. Byrne & John G. Fernald & Marshall B. Reinsdorf, 2016. "Does the United States Have a Productivity Slowdown or a Measurement Problem?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 47(1 (Spring), pages 109-182.
    4. David M. Byrne & Stephen D. Oliner & Daniel E. Sichel, 2013. "Is the Information Technology Revolution Over?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 25, pages 20-36, Spring.
    5. Kenneth Flamm, 2019. "Measuring Moore’s Law: Evidence from Price, Cost, and Quality Indexes," NBER Chapters, in: Measuring and Accounting for Innovation in the Twenty-First Century, pages 403-470, National Bureau of Economic Research, Inc.
    6. David Byrne & Carol Corrado, 2020. "Accounting for Innovations in Consumer Digital Services: IT Still Matters," NBER Chapters, in: Measuring and Accounting for Innovation in the Twenty-First Century, pages 471-517, National Bureau of Economic Research, Inc.
    7. Kenneth Flamm, 2018. "Measuring Moore’s Law: Evidence from Price, Cost, and Quality Indexes," NBER Working Papers 24553, National Bureau of Economic Research, Inc.
    8. Daniel Melser & Iqbal A. Syed, 2013. "Prices over the Product Life Cycle: Implications for Quality-Adjustment and the Measurement of Inflation," Discussion Papers 2013-26, School of Economics, The University of New South Wales.

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    More about this item

    Keywords

    Seasonal adjustment; Software prices; Heterogeneity; Price indexes; C43; E31; L86;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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