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1994•Journal of Business and Economic StatisticsRequires access

A Quality-Adjusted Price Index for Personal Computers

Randy A. Nelson, Tim L. Tanguay, Christopher D. Patterson

Open publisher page 83 citations

Abstract

This study estimates quality-adjusted price indexes for personal computers. Three separate hedonic models are estimated using data from 1,841 personal computers over the period 1984–1991. In addition to the traditional linear model, a nonlinear model is developed and estimated. The nonlinear model is parsimonious in parameters, allows time-varying attribute prices, and can be estimated using a pooled data set. The results indicate that nominal quality-adjusted prices of mail-order firms declined at an average annual rate of 24.62%; quality-adjusted prices of major manufacturers declined at a slower rate.

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What this paper is about

This study estimates quality-adjusted price indexes for personal computers. Three separate hedonic models are estimated using data from 1,841 personal computers over the period 1984–1991. In addition to the traditional linear model, a nonlinear model is developed and estimated. The nonlinear model is parsimonious in parameters, allows time-varying attribute prices, and can be estimated using a pooled data set. The results indicate that nominal quality-adjusted prices of mail-order firms declined at an average annual rate of 24.62%; quality-adjusted prices of major manufacturers declined at a slower rate.

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OpenAlex reports 83 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available abstract

This study estimates quality-adjusted price indexes for personal computers. Three separate hedonic models are estimated using data from 1,841 personal computers over the period 1984–1991. In addition to the traditional linear model, a nonlinear model is developed and estimated. The nonlinear model is parsimonious in parameters, allows time-varying attribute prices, and can be estimated using a pooled data set. The results indicate that nominal quality-adjusted prices of mail-order firms declined at an average annual rate of 24.62%; quality-adjusted prices of major manufacturers declined at a slower rate.

Key concepts: Econometrics, Index (typography), Price index, Quality (philosophy), Data set, Statistics, Hedonic index, Order (exchange)

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