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Estimating Future Consumer Welfare Gains from Innovation: The Case of Digital Data Storage

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  • Austin, David
  • Macauley, Molly

    (Resources for the Future)

Abstract

We develop a quality-adjusted cost index to estimate expected returns to investments in new technologies. The index addresses the problem of measuring social benefits from innovations in service sector inputs, where real output is not directly observable. We forecast welfare gains from two U.S. Advanced Technology Program innovations equaling 25%-50% of expected price, and aggregate consumer benefits of $1-$2 billion, relative to trends in existing technologies. Our model’s probabilistic parameters reflect uncertainty about prospective outcomes and in our hedonic estimates of shadow values for selected product attributes. The index can be readily adopted by research and development (R&D) managers in industry and government.

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  • Austin, David & Macauley, Molly, 2000. "Estimating Future Consumer Welfare Gains from Innovation: The Case of Digital Data Storage," RFF Working Paper Series dp-00-13, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-00-13
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    References listed on IDEAS

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    1. repec:ucp:bknber:9780226304557 is not listed on IDEAS
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    6. Hausman, Jerry, 1999. "Cellular Telephone, New Products, and the CPI," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(2), pages 188-194, April.
    7. Robert J. Gordon, 1990. "The Measurement of Durable Goods Prices," NBER Books, National Bureau of Economic Research, Inc, number gord90-1, July.
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    Cited by:

    1. MacAuley, Molly K. & Shih, Jhih-Shyang & Aronow, Emily & Austin, David H. & Bath, Tom & Darmstadter, Joel, 2002. "Measuring the Contribution to the Economy of Investments in Renewable Energy: Estimates of Future Consumer Gains," Discussion Papers 10588, Resources for the Future.
    2. MacAuley, Molly K. & Darmstadter, Joel & Fini, John N. & Greenberg, Joel S. & Maulbetsch, John S. & Schaal, A. Michael & Styles, Geoffrey S.W. & Vedda, James A., 2000. "Can Power from Space Compete?," Discussion Papers 10542, Resources for the Future.
    3. Nathalie Taverdet-Popiolek, 2022. "Economic Footprint of a Large French Research and Technology Organisation in Europe: Deciphering a Simplified Model and Appraising the Results," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(1), pages 44-69, March.

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