In this paper, we attempt to calculate a quality-adjusted personal computer price index. To calculate a quality-adjusted personal-computer price Index we utilize the framework of the hedonic approach(methodology to analyze the price-quality relationsh...
In this paper, we attempt to calculate a quality-adjusted personal computer price index. To calculate a quality-adjusted personal-computer price Index we utilize the framework of the hedonic approach(methodology to analyze the price-quality relationship by regressing prices on numerous characteristics of a product). Comparing a non-adjusted-quality personal computer price index, we Investigate the trend of inflation rate of a quality-adjusted personal computer price index. Moreover we analyze the PPI of ICT including the quality-adjusted price index. The conclusion which can be drawn from the study are these: 1) personal computer and peripheral device price Index decline at about 42.84%p over the 1991∼1999 time period 2) price index in office accounting machinery and ICT decline 42.11%p, 5.99%p respectively 3) PPI decline 0.484%p due to the rapid technological development in the personal computer Industry 4) because quality changes are not properly taken into account there is upward bias at about 0.04∼0.05%p per year over the 1991∼1999 time period 5) from the above evidence, if we calculate the quality-adjusted price index including more ICT related products, we may expect to decline price index considerably.