AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
When Do Chained Deflators for IT Goods Overstate Quality Change?
AEA Papers and Proceedings
(pp. 556–561)
Abstract
In general, chained deflators for IT goods will have a commingling problem that causes them to overstate quality growth. We base this on a comparison of chained superlative indexes with a multilateral index that does not have the commingling problem—the weighted time product dummy index. Empirical results from three recent studies suggest that this can occur often—we saw this in 9 of the 12 categories studied—and that the gaps can be nontrivial. We argue that the recently developed multilateral methods may be a better strategy in price measurement for this sector.Citation
Aizcorbe, Ana, and Daniel Ripperger-Suhler. 2026. "When Do Chained Deflators for IT Goods Overstate Quality Change?" AEA Papers and Proceedings 116: 556–561. DOI: 10.1257/pandp.20261061Additional Materials
JEL Classification
- C43 Index Numbers and Aggregation; leading indicators
- E31 Price Level; Inflation; Deflation
- L13 Oligopoly and Other Imperfect Markets
- L63 Microelectronics; Computers; Communications Equipment