IDEAS home Printed from https://ideas.repec.org/p/fip/fedgfe/2015-69.html
   My bibliography  Save this paper

Prices for Communications Equipment: Rewriting the Record

Author

Abstract

Communication equipment plays as large a role in high-tech investment as computers, yet prices for communication equipment have not been studied as extensively as prices for computers and electronic components. Prices for satellites, cell phones, and the ground stations for these systems--important components of a nation's communications infrastructure--are difficult to locate in official statistics. This paper develops new price measures for 16 types of communications equipment from 1963 to 2009. Indexes for some (e.g., cellular phone systems) experience declines of 15-20 percent per year, similar to the decline in quality-adjusted prices for computers, and suggest that advances in wireless communications technology have been very rapid. All told, our price index for domestic production falls 4.8 percent per year on average over the time period we study and 9.8 percent per year on average since 1985--nearly 10 percentage points faster than the official U.S. producer price index introduced in that year.

Suggested Citation

  • David M. Byrne & Carol Corrado, 2015. "Prices for Communications Equipment: Rewriting the Record," Finance and Economics Discussion Series 2015-69, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:2015-69
    DOI: 10.17016/FEDS.2015.069
    as

    Download full text from publisher

    File URL: http://www.federalreserve.gov/econresdata/feds/2015/files/2015069pap.pdf
    File Function: Full text
    Download Restriction: no
    File URL: http://dx.doi.org/10.17016/FEDS.2015.069
    File Function: http://dx.doi.org/10.17016/FEDS.2015.069
    Download Restriction: no
    File URL: https://libkey.io/10.17016/FEDS.2015.069?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. repec:ucp:bknber:9780226304557 is not listed on IDEAS
    2. Kimberly Bayard & Charles E. Gilbert, 2005. "Industrial production and capacity utilization: the 2004 annual revision," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 91(Win), pages 9-25.
    3. Doms, Mark & Forman, Chris, 2005. "Prices for local area network equipment," Information Economics and Policy, Elsevier, vol. 17(3), pages 365-388, July.
    4. Robert J. Gordon, 2006. "The Boskin Commission Report: A Retrospective One Decade Later," International Productivity Monitor, Centre for the Study of Living Standards, vol. 12, pages 7-22, Spring.
    5. Kimberly Bayard & Norman J. Morin, 2004. "Industrial production and capacity utilization: the 2003 annual revision," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 90(Win), pages 32-46.
    6. Mark Doms, 2005. "Communications Equipment: What Has Happened to Prices?," NBER Chapters, in: Measuring Capital in the New Economy, pages 323-362, National Bureau of Economic Research, Inc.
    7. Carol Corrado, 2001. "Industrial production and capacity utilization: the 2000 annual revision," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 87(Mar), pages 132-148, March.
    8. Naoki Watanabe & Ryo Nakajima & Takanori Ida, 2010. "Quality-Adjusted Prices of Japanese Mobile Phone Handsets and Carriers’ Strategies," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 36(4), pages 391-412, June.
    9. Hausman, Jerry, 1999. "Cellular Telephone, New Products, and the CPI," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(2), pages 188-194, April.
    10. Carol Corrado, 2003. "Industrial production and capacity utilization: the 2002 historical and annual revision," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 89(Apr), pages 151-176, April.
    11. Anne E. Hall, 2009. "Industrial production and capacity utilization: the 2009 annual revision," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 95(Aug), August.
    12. Robert J. Gordon, 1990. "The Measurement of Durable Goods Prices," NBER Books, National Bureau of Economic Research, Inc, number gord90-1.
    13. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
    14. Jack Triplett, 2004. "Handbook on Hedonic Indexes and Quality Adjustments in Price Indexes: Special Application to Information Technology Products," OECD Science, Technology and Industry Working Papers 2004/9, OECD Publishing.
    15. Kimberly Bayard & Charles E. Gilbert, 2008. "Industrial production and capacity utilization: the 2008 annual revision," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 94(Aug), pages 41-60, August.
    16. Kimberly Bayard & Charles E. Gilbert, 2006. "Industrial production and capacity utilization: the 2005 annual revision," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 92(Mar), pages 39-58.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Leonard Nakamura & Jon Samuels & Rachel Soloveichik, 2017. "Measuring the “Free” Digital Economy within the GDP and Productivity Accounts," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2017-03, Economic Statistics Centre of Excellence (ESCoE).
    2. David Byrne & Brian K. Kovak & Ryan Michaels, 2013. "Price and Quality Dispersion in an Offshoring Market: Evidence from Semiconductor Production Services," NBER Working Papers 19637, National Bureau of Economic Research, Inc.
    3. Leonard I. Nakamura & Jon Samuels & Rachel Soloveichik, 2016. "Valuing \"Free\" Media in GDP: An Experimental Approach," Working Papers 16-24, Federal Reserve Bank of Philadelphia.
    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. Haskel, Jonathan & Edquist, Harald & Goodridge, Peter, 2019. "Productivity, Network Effects and Telecommunications Capital: Evidence from the US and Europe," CEPR Discussion Papers 13910, C.E.P.R. Discussion Papers.
    6. Nadim Ahmad & Paul Schreyer, 2016. "Are GDP and Productivity Up to the Challenges of the Digital Economy?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 30, pages 4-27, Spring.
    7. Goodridge, Peter & Haskel, Jonathan & Edquist, Harald, 2019. "The economic contribution of the “C” in ICT: Evidence from OECD countries," Journal of Comparative Economics, Elsevier, vol. 47(4), pages 867-880.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Corrado Carol & Lengermann Paul & Beaulieu J. Joseph & Bartelsman Eric J., 2007. "Sectoral Productivity in the United States: Recent Developments and the Role of IT," German Economic Review, De Gruyter, vol. 8(2), pages 188-210, May.
    2. John G. Fernald, 2015. "Productivity and Potential Output before, during, and after the Great Recession," NBER Macroeconomics Annual, University of Chicago Press, vol. 29(1), pages 1-51.
    3. Doms, Mark & Forman, Chris, 2005. "Prices for local area network equipment," Information Economics and Policy, Elsevier, vol. 17(3), pages 365-388, July.
    4. Robert J. Hill & Daniel Melser, 2008. "Hedonic Imputation And The Price Index Problem: An Application To Housing," Economic Inquiry, Western Economic Association International, vol. 46(4), pages 593-609, October.
    5. W. Erwin Diewert & Kevin J. Fox, 2022. "Measuring real consumption and consumer price index bias under lockdown conditions," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(S1), pages 480-502, February.
    6. W. Erwin Diewert, 1998. "Index Number Issues in the Consumer Price Index," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 47-58, Winter.
    7. Mark A. Wynne & Diego Rodriguez‐Palenzuela, 2004. "Measurement Bias in the HICP: What do we know and What do we need to know?," Journal of Economic Surveys, Wiley Blackwell, vol. 18(1), pages 79-112, February.
    8. Dale W. Jorgenson & J. Steven Landefeld, 2006. "Blueprint for Expanded and Integrated US Accounts: Review, Assessment, and Next Steps," NBER Chapters, in: A New Architecture for the US National Accounts, pages 13-112, National Bureau of Economic Research, Inc.
    9. repec:bla:germec:v:8:y:2007:i::p:188-210 is not listed on IDEAS
    10. Paul Chwelos & Ronald Ramirez & Kenneth L. Kraemer & Nigel P. Melville, 2010. "Research Note ---Does Technological Progress Alter the Nature of Information Technology as a Production Input? New Evidence and New Results," Information Systems Research, INFORMS, vol. 21(2), pages 392-408, June.
    11. W. Erwin Diewert & Robert C. Feenstra, 2021. "Estimating the Benefits of New Products," NBER Chapters, in: Big Data for Twenty-First-Century Economic Statistics, pages 437-473, National Bureau of Economic Research, Inc.
    12. David Colman, 2010. "Agriculture's terms of trade: issues and implications," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 1-15, November.
    13. Diewert, W, Erwin & Feenstra, Robert, 2017. "Estimating the Benefits and Costs of New and Disappearing Products," Microeconomics.ca working papers tina_marandola-2017-12, Vancouver School of Economics, revised 19 Dec 2017.
    14. Stranger, Greg & Greenstein, Shane, 2008. "Pricing in the shadow of firm turnover: ISPs during the 1990s," International Journal of Industrial Organization, Elsevier, vol. 26(3), pages 625-642, May.
    15. 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.
    16. Charles R. Hulten, 2000. "Total Factor Productivity: A Short Biography," NBER Working Papers 7471, National Bureau of Economic Research, Inc.
    17. Diewert, Erwin, 2007. "The Ottawa Group after Ten Meetings: Future Priorities," Economics working papers diewert-07-11-16-12-30-23, Vancouver School of Economics, revised 16 Nov 2007.
    18. Diewert, Erwin & FOX, Kevin J. Fox & SCHREYER, Paul, 2017. "The Digital Economy, New Products and Consumer Welfare," Microeconomics.ca working papers erwin_diewert-2017-12, Vancouver School of Economics, revised 14 Dec 2017.
    19. Kenn Ariga & Kenji Matsui, 2003. "Mismeasurement of the CPI," NBER Chapters, in: Structural Impediments to Growth in Japan, pages 89-154, National Bureau of Economic Research, Inc.
    20. Lieu, Pang-Tien & Liang, Jung-Hui & Chen, Jui-Hui, 2008. "Consumer preferences and cost of living in Taiwan," Journal of Asian Economics, Elsevier, vol. 19(3), pages 224-235, June.
    21. Silver, Mick & Heravi, Saeed, 2005. "A Failure in the Measurement of Inflation: Results From a Hedonic and Matched Experiment Using Scanner Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 23, pages 269-281, July.

    More about this item

    Keywords

    ICT; communications equipment; price measurement; technical change; wireless technology; communications technology; communications equipment industry;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedgfe:2015-69. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ryan Wolfslayer ; Keisha Fournillier (email available below). General contact details of provider: https://edirc.repec.org/data/frbgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.