Open AccessThe Growth of Network Computing: Quality‐Adjusted Price Changes for Network Servers *
Author(s) -
Reenen John Van
Publication year - 2006
Publication title -
the economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.683
H-Index - 160
eISSN - 1468-0297
pISSN - 0013-0133
DOI - 10.1111/j.1468-0297.2006.01063.x
Subject(s) - server , index (typography) , computer science , quality (philosophy) , productivity , acceleration , price index , software , component (thermodynamics) , econometrics , economics , computer network , operating system , macroeconomics , world wide web , philosophy , epistemology , physics , thermodynamics , classical mechanics
This article investigates the evolution of quality‐adjusted prices for servers motivated by two facts. First, the recent productivity acceleration in the US is closely linked to the spread of IT 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 server hardware and software. The preferred hedonic price index fell much more rapidly than the standard ‘matched model’ price index, mainly due to the selection bias in the standard model arising from the exit of obsolete models, which would have had the fastest price falls.