Since the introduction of the IBM PC in 1981, "personal" computers have undergone rapid technological innovation in terms of performance, storage, communication capability, and portability. While significant effort has been directed at quantifying the price-performance relationship in PC's, surprisingly little attention has been paid to portability. This attribute is evidently highly valued by users: sales of mobile computers (laptops and palmtops) account for one third of total PC sales and are increasing rapidly, despite very substantial price premiums over desktop models with comparable performance. Using hedonics and other econometric techniques, this project evaluates the economic benefits to users arising from improved performance and rapid diffusion of mobile computers, through examination of the price, welfare, and demand implications of the emergence of portability as a "new good" in the PC market.
This grant supports the data collection phase of the project. An existing large database of PC computer prices and characteristics will be extended and updated. This effort will include gathering data on sales volumes by model, as well as on prices and characteristics of "new" devices such as palmtops and PDAs, which have not been tracked in the past. Data for earlier years will be "back-filled" to increase the frequency of observations to quarterly or monthly.
Rapidly falling prices and continuing technological innovation will continue to drive the diffusion of mobile devices into many areas of economic and social interaction. This work will provide insights into the economic consequences of this important trend, particularly those related to consumer welfare, tradeoffs between portability and performance, and complementarity/substitutability of fixed and mobile computers. As government statistical agencies continue to develop procedures for tracking price changes and technological progress in computing-intensive sectors, this work will also make contributions to the vigorous debate on evaluating the contribution of IT to growth and productivity.