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Are consumers forward looking? Evidence from used iPhones

Author

Listed:
  • Kanis Saengchote
  • Voraprapa Nakavachara

Abstract

This study examines the impact of planned obsolescence – the introduction of new models to make existing models obsolete – on secondary markets for mobile phones. Using data of over 320,000 used iPhones listings on Thailand’s largest online marketplace, we document that iPhone prices decrease with age, around 2.8–3.2% for each passing month. We find no evidence that the price decline accelerates after launches of new models (i.e. obsolescence), lending support to the view that consumer in durable goods markets are rational and forward looking.

Suggested Citation

  • Kanis Saengchote & Voraprapa Nakavachara, 2018. "Are consumers forward looking? Evidence from used iPhones," Applied Economics Letters, Taylor & Francis Journals, vol. 25(13), pages 905-909, July.
    • Handle: RePEc:taf:apeclt:v:25:y:2018:i:13:p:905-909
    DOI: 10.1080/13504851.2017.1380286
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    Cited by:

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    2. Guo, Audrey & Zhang, Jonathan, 2019. "What to expect when you are expecting: Are health care consumers forward-looking?," Journal of Health Economics, Elsevier, vol. 67(C).

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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