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Welfare effects of quality change and new products in the Japanese mobile telecommunications market: 1995-2001

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  • Mitsuru Sunada

Abstract

This paper presents a simple framework based on a discrete choice model to assess the welfare effects of quality change and new products. Such a framework is shown to be useful where the hedonic approach is impracticable. This framework is applied to the Japanese mobile telecommunications market during the period 1995-2001. The estimated qualities for mobile telecommunications services in Japan are shown to have improved rapidly during this period, indicating the importance of quality change in the welfare gains of consumers relative to price change, and the need to adjust quality change in the construction of price indexes. However, it is also proven, at least in the earliest stages, that the effect of new services on consumer welfare was limited.

Suggested Citation

  • Mitsuru Sunada, 2005. "Welfare effects of quality change and new products in the Japanese mobile telecommunications market: 1995-2001," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(8), pages 715-733.
    • Handle: RePEc:taf:ecinnt:v:14:y:2005:i:8:p:715-733
    DOI: 10.1080/10438590500063921
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    References listed on IDEAS

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    1. Okada, Yosuke & Hatta, Keiko, 1999. "The Interdependent Telecommunications Demand and Efficient Price Structure," Journal of the Japanese and International Economies, Elsevier, vol. 13(4), pages 311-335, December.
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    8. Shane M. Greenstein, 1996. "From Superminis to Supercomputers: Estimating Surplus in the Computing Market," NBER Chapters, in: The Economics of New Goods, pages 329-372, National Bureau of Economic Research, Inc.
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    Cited by:

    1. MATSUURA Toshiyuki & SUNADA Mitsuru, 2009. "Measurement of the Consumer Benefit of Competition in Retail Outlets," Discussion papers 09015, Research Institute of Economy, Trade and Industry (RIETI).

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