Prices for Local Area Network Equipment

In this paper we examine quality-adjusted prices for local area network (LAN) equipment. Hedonic regressions are used to estimate price changes for the two largest classes of LAN equipment, routers and switches. A matched model was used for LAN cards and the prices for hubs were inferred by using an economic relationship to switches. Overall, we find that prices for the four groups of LAN equipment fell at a 17 percent annual rate between 1995 and 2000. These results stand in sharp contrast to the PPI for communications equipment that is nearly flat over the 1990s.

[1]  S. Greenstein,et al.  Measuring the Performance of a Protected Infant Industry: The Case of Brazilian Microcomputers , 1995 .

[2]  Ernst R. Berndt,et al.  Price and Quality of Desktop and Mobile Personal Computers: A Quarter-Century Historical Overview , 2001 .

[3]  Carol Corrado.  Industrial production and capacity utilization: the 2000 annual revision , 2001 .

[4]  W. Diewert.  Axiomatic and Economic Approaches to Elementary Price Indexes , 1995 .

[5]  Kenneth Flamm,et al.  Targeting the Computer: Government Support and International Competition , 1987 .

[6]  Chris Forman.  Switching Costs, Network Effects, and Networking Equipment: Compatibility and Vendor Choice in the Market for LAN Equipment , 2002, ICIS.

[7]  Ariel Pakes,et al.  A Reconsideration of Hedonic Price Indexes with an Application to Pc's , 2002 .

[8]  Ana Aizcorbe,et al.  The Role of Semiconductor Inputs in it Hardware Price Decline: Computers Vs. Communications , 2002 .

[9]  Z. Griliches.  Research Costs and Social Returns: Hybrid Corn and Related Innovations , 1958, Journal of Political Economy.

[10]  Tarek M. Harchaoui,et al.  The prices of classical recorded music: a hedonic approach , 2000 .

[11]  Amil Petrin.  Quantifying the Benefits of New Products: The Case of the Minivan , 2001, Journal of Political Economy.

[12]  M. Cave.  Changing the rules: technological change, international competition and regulation in communications , 1990 .

[13]  Hal R. Varian,et al.  Information rules - a strategic guide to the network economy , 1999 .

[14]  P. Klemperer,et al.  Coordination and Lock-In: Competition with Switching Costs and Network Effects , 2006 .

[15]  Erik Brynjolfsson,et al.  The Contribution of Information Technology to Consumer Welfare , 1996, Inf. Syst. Res..

[16]  R. Feenstra,et al.  Exact Hedonic Price Indexes , 1995 .

[17]  Jerry A. Hausman,et al.  Cellular Telephone, New Products and the CPI , 1997 .

[18]  S. Klepper.  Entry, Exit, Growth, and Innovation over the Product Life Cycle , 1996 .

[19]  Neil Gandal.  Hedonic price indexes for spreadsheets and an empirical test of the network externalities hypothesis , 1992 .

[20]  R. Nelson,et al.  A Quality-Adjusted Price Index for Personal Computers , 1994 .

[21]  S. Klepper,et al.  Time Paths in the Diffusion of Product Innovations , 1982 .

[22]  Robert J. Gordon,et al.  The measurement of durable goods prices , 1991 .

[23]  H. White.  A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity , 1980 .

[24]  Karen Southwick,et al.  Making the Cisco Connection: The Story Behind the Real Internet Superpower , 2000 .

[25]  P. Klemperer.  Competition when Consumers have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade , 1992 .

[26]  D. Jorgenson,et al.  Raising the Speed Limit: U.S. Economic Growth in the Information Age , 2000 .

[27]  Michael J. Boskin,et al.  Toward a More Accurate Measure of the Cost of Living , 1996 .

[28]  Manuel Trajtenberg,et al.  Economic Analysis of Product Innovation: The Case of CT Scanners , 1990 .

[29]  Matthew D. Shapiro,et al.  Mismeasurement in the Consumer Price Index: An Evaluation , 1996, NBER Macroeconomics Annual.

[30]  Paul Chwelos,et al.  Approaches to performance measurement in hedonic analysis: Price indexes for laptop computers in the 1990's , 2003 .

[31]  Steven T. Berry,et al.  Automobile Prices in Market Equilibrium , 1995 .