Hostname: page-component-cd9895bd7-jkksz Total loading time: 0 Render date: 2024-12-28T03:44:26.498Z Has data issue: false hasContentIssue false
  • English
  • Français

The Mysterious Cross-Country Dispersion in Mobile Phone Price Trends

Published online by Cambridge University Press:  01 January 2020

David M. Byrne
David M. Byrne*
Affiliation:
Federal Reserve Board of Governors
*
E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Mobile phones have been central to ICT innovation since the introduction of the smartphone and constant-quality prices are a barometer of their economic impact. Official consumer price indices (CPIs) indicate that impact differs wildly across countries: for the 2008–18 period, average annual rates of mobile phone inflation range from no change to a 25 per cent decline among 12 key countries examined in this paper. Although evidence indicates certain fundamental factors are at play, mis-measurement may lead the spread in rates to be overstated. Examination of methods employed in CPI calculation, including quality adjustment and index formulas, illuminates but does not resolve the mystery.

Keywords

price indexesinformation and communications technologyE31O57
Type
Research Articles
Information
National Institute Economic Review , Volume 249 , August 2019 , pp. R39 - R46
Copyright
Copyright © 2019 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

This paper is not an expression of the views of the Board of Governors. The author thanks Ana Aizcorbe, Marshall Reinsdorf, Dan Sichel and Rob Vigfusson for helpful comments and the staffs of the national statistics institutes of the countries covered in this study.

References

Ahmad, N., Ribarsky, J. and Reinsdorf, M. (2017), ‘Can potential mismeasurement of the digital economy explain the post-crisis slowdown in GDP and productivity growth?’, OECD Statistics Working Paper.Google Scholar
Aizcorbe, A., Byrne, D. and Sichel, D. (2019), ‘Getting smart about phones: new price indexes and the allocation of spending between devices and services plans in personal consumption expenditures’, NBER Working Paper 25645.CrossRefGoogle Scholar
Aizcorbe, A. (2014), A Practical Guide to Price Index and Hedonic Techniques, New York: Oxford University Press.CrossRefGoogle Scholar
Bean, C. (2016), ‘Independent review of UK economic statistics’, London: Chancellor of the Exchequer.Google Scholar
Brynjolfsson, E., Collis, A. and Eggers, F. (2019), ‘Using massive online choice experiments to measure changs in well-being’, Proceedings of the National Academy of Sciences of the United States of America, 116, pp. 7250–5.CrossRefGoogle Scholar
Byrne, D. and Corrado, C. (2017a), ‘ICT services and their prices: what do they tell us about productivity and technology?’, International Productivity Monitor, 33, pp. 150–81.Google Scholar
Byrne, D. and Corrado, C. (2017b), ‘ICT asset prices: marshaling evidence into new measures’, Finance and Economic Discussion Series, 2017-016.CrossRefGoogle Scholar
Byrne, D. and Corrado, C. (2019), ‘Accounting for innovations in consumer digital services: IT still matters’, Finance and Economics Discussion Series, Divisions of Research & Statistics and Monetary Affairs, Federal Reserve Board, Washington, D.C.Google Scholar
Byrne, D.Corrado, C. and Sichel, D. (2018), ‘The rise of cloud computing: minding your Ps, Qs and Ks’, in Measuring and Accounting for Innovation in the 21st Century, University of Chicago Press.Google Scholar
Byrne, D. and Pinto, E. (2015), ‘The recent slowdown in high-tech equipment price declines and some implications for business investment and labor productivity’, FEDS Notes.CrossRefGoogle Scholar
Eurostat (2018), Harmonized Index of Consumer Prices (HICP) Methodological Manual, Luxembourg: Eurostat.Google Scholar
Jorgenson, D. (2001), ‘Information technology and the U.S. economy’, American Economic Review, 91, pp. 1–32.CrossRefGoogle Scholar
Jorgenson, D., Ho, M. and Stiroh, K. (2008), ‘A retrospective look at the US productivity growth resurgence’, Journal of Economic Perspectives, 22, pp. 3–24.CrossRefGoogle Scholar
Silver, M. and Heravi, S. (2007), ‘Why elementary price index number formulas differ: evidence on price dispersion’, Journal of Econometrics, 140, pp. 874–83.CrossRefGoogle Scholar
Triplett, J. (2006), Handbook on Hedonic Indexes and Quality Adjustments in Price Indexes: Special Application to Information Technology Products, Paris and Washington, D.C.: Organisation for Economic Co-operation and Development.CrossRefGoogle Scholar