Estimating the economic benefits of advances in computer technology

Until recently, hedonic price indexes were the predominant method for measuring the improvements in price per performance for mainframe computers. These indexes showed that price per performance improved at roughly 20-25% over the past 30 years. However, little attention has been given to how well these indexes measure the benefits buyers receive from improvements in computer technology. Trajtenberg (1990) proposed an alternative measure which purports to measure the benefits from product innovation and applied his procedure to the computed tomography scanner industry. His results show that hedonic indexes understate the true benefits from improvements in technology in that industry. In this work we have proposed an alternative procedure which also measures the benefits which accrue to buyers from improving product technology. We find, in contrast to the results of Trajtenberg, that the hedonic index overstates the true benefits to buyers from product innovation in the mainframe computer industry.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Economics

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2011

Author dc:creator

• Brown, Kenneth Hackman

Contributors dc:contributor

• Greenstein, Shane M.

• Economics, General

Statement dc:rights

• Copyright 1994 Brown, Kenneth Hackman

Language dc:language

eng

Identifier

AAI9512309
(UMI)AAI9512309

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/22729