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The growth of network computing : quality adjusted price changes for network servers

Van Reenen, John (2005) The growth of network computing : quality adjusted price changes for network servers. 702. Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

In this paper we investigate the evolution of quality adjusted prices for servers motivated by two facts. First, the productivity acceleration in the US economy since the mid 1990s is closely linked to spread of information technology of which networked computing is a large component. Second, the growth of network computing itself has been fostered by the rapid growth in the quality and quantity of the network server market. Like Pakes’ (2003) analysis of the PC market, we show that our preferred version of the hedonic price index (“complete hybrid”) fell much more rapidly than the standard “matched model” price index (the hedonic index fell on average by about 30% per annum compared to 17% p.a. for the matched model). This difference is mainly due to the selection bias in the standard matched model price index due to the exit of obsolete models which would have had the fastest price falls.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk
Additional Information: © 2005 J. Van Reenen
Library of Congress subject classification: H Social Sciences > H Social Sciences (General)
Journal of Economic Literature Classification System: L - Industrial Organization > L4 - Antitrust Issues and Policies
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Departments > Economics
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 702
Date Deposited: 16 May 2006
URL: http://eprints.lse.ac.uk/772/

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