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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: david.m.byrne@frb.gov
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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

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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.

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