Other than the hedonic method, which is mainly used in the USA, the traditional practice of statistical agencies in Germany possibly leads to a systematic under-representation of quality change. This is in particular the case regarding information and communication technologies which have played a crucial role in the creation of the New Economy, for they show strong improvements regarding quality in short periods of time. The consequences of this realisation are enormous. It could lead to a revision of the commonly accepted impression, that the development of these technologies and the resulting gains in productivity in the USA is far superior to that in Europe. A Financial Times article calls this process "Wealth by accounting". On the other hand, it is also of interest to those companies which have already chosen Europe as their location, that those national capital markets which they rely on do not face disadvantages through differences in statistical methods. These differences become particularly obvious when studying the market for personal computers (PC). Studies have shown that, taking the strong growth of quality into account, prices have been declining 30% per year on average. Therefore the markets for PCs in France and Germany will be compared. For both markets, those product characteristics which determine PC prices will be identified. From the business point of view the question is of special interest, whether the valuations for the respective characteristics differ by country. This implicitly bears relevance for the marketing strategy for IT-goods in these two countries.

Selected Publications

Discussion and Working Papers

Moch, Dietmar and Jack Triplett (2001), International Hedonic Price Indexes - A Comparison of PC Prices between France and Germany, mimeo, ZEW Mannheim, Brookings Institution.

Project duration

01.03.2001 - 31.12.2003

Contact
Project members

Dietmar Moch (Coordinator)
Dr. Georg Licht

Cooperation partner

Isabelle Remond Tiedrez, Institut National de la Statistique et des Etudes Economiques, Paris, FR
Philippe Scherrer, Institut National de la Statistique et des Etudes Economiques (INSEE), Paris, F
Dr. Paul Schreyer, Organisation for Economic Cooperation and Development, Paris, FR
Prof. Dr. Jack E. Triplett, The Brookings Institution, Washington D.C., USA