IDEAS home Printed from https://ideas.repec.org/p/ags/rffdps/10814.html
   My bibliography  Save this paper

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

Author

Listed:
  • Austin, David H.
  • MacAuley, Molly K.

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.

Suggested Citation

  • Austin, David H. & MacAuley, Molly K., 2000. "Estimating Future Consumer Welfare Gains from Innovation: The Case of Digital Data Storage," Discussion Papers 10814, Resources for the Future.
    • Handle: RePEc:ags:rffdps:10814
    DOI: 10.22004/ag.econ.10814
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/10814/files/dp000013.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.10814?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. repec:ucp:bknber:9780226304557 is not listed on IDEAS
    2. Brent R. Moulton & Karin E. Moses, 1997. "Addressing the Quality Change Issue in the Consumer Price Index," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1), pages 305-366.
    3. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity," Econometrica, Econometric Society, vol. 50(6), pages 1393-1414, November.
    4. Robert J. Gordon, 1990. "The Measurement of Durable Goods Prices," NBER Books, National Bureau of Economic Research, Inc, number gord90-1, June.
    5. Bresnahan, Timothy F, 1986. "Measuring the Spillovers from Technical Advance: Mainframe Computers inFinancial Services," American Economic Review, American Economic Association, vol. 76(4), pages 742-755, September.
    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. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Austin, David H. & MacAuley, Molly K., 1998. "A Quality-Adjusted Cost Index for Estimating Future Consumer Surplus from Innovation," Discussion Papers 10655, Resources for the Future.
    2. Robert J. Gordon, 2006. "The Boskin Commission Report: A Retrospective One Decade Later," International Productivity Monitor, Centre for the Study of Living Standards, vol. 12, pages 7-22, Spring.
    3. Jeanneaux, Philippe & Latruffe, Laure, 2016. "Modelling pollution-generating technologies in performance benchmarking: Recent developments, limits and future prospects in the nonparametric frameworkAuthor-Name: Dakpo, K. Hervé," European Journal of Operational Research, Elsevier, vol. 250(2), pages 347-359.
    4. David M. Byrne & John G. Fernald & Marshall B. Reinsdorf, 2016. "Does the United States Have a Productivity Slowdown or a Measurement Problem?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 47(1 (Spring), pages 109-182.
    5. Richard G. Newell & Adam B. Jaffe & Robert N. Stavins, 1999. "The Induced Innovation Hypothesis and Energy-Saving Technological Change," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 941-975.
    6. Nazir Ullah Khan & Abdur Rehman, 2022. "Decomposition of Total Factor Productivity of Cash Crops in Pakistan: A Malmquist Data Envelop Analysis," Journal of Economic Impact, Science Impact Publishers, vol. 4(1), pages 139-144.
    7. Lukáš Čechura & Zdeňka Žáková Kroupová & Irena Benešová, 2021. "Productivity and Efficiency in European Milk Production: Can We Observe the Effects of Abolishing Milk Quotas?," Agriculture, MDPI, vol. 11(9), pages 1-21, August.
    8. Kenn Ariga & Kenji Matsui, 2003. "Mismeasurement of the CPI," NBER Chapters, in: Structural Impediments to Growth in Japan, pages 89-154, National Bureau of Economic Research, Inc.
    9. Constant, Labintan Adeniyi & Shijun, Ding, 2012. "Benin Agriculture Productivity and profitability Measurement," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126748, International Association of Agricultural Economists.
    10. Briec, Walter & Mussard, Stéphane, 2020. "Improvement of technical efficiency of firm groups," European Journal of Operational Research, Elsevier, vol. 283(3), pages 991-1001.
    11. Langford, Richard P. & Gillingham, Kenneth, 2023. "Quantifying the benefits of the introduction of the hybrid electric vehicle," International Journal of Industrial Organization, Elsevier, vol. 87(C).
    12. Mizobuchi, Hideyuki, 2010. "New indices of labour productivity growth: Baumol’s disease revisited," MPRA Paper 31151, University Library of Munich, Germany.
    13. Mullen, John D. & Cox, Thomas L., 1996. "Measuring Productivity Growth In Australian Broadacre Agriculture," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 40(3), pages 1-22, December.
    14. David K. Lambert & Elliott Parker, 1998. "Productivity in Chinese Provincial Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(3), pages 378-392, September.
    15. Shao, Benjamin B.M. & Lin, Winston T., 2016. "Assessing output performance of information technology service industries: Productivity, innovation and catch-up," International Journal of Production Economics, Elsevier, vol. 172(C), pages 43-53.
    16. Hoffmann, Johannes, 1998. "Problems of inflation measurement in Germany," Discussion Paper Series 1: Economic Studies 1998,01e, Deutsche Bundesbank.
    17. Gian Maria Tomat, 2005. "Prices, Product Differentiation And Quality Measurement: A Comparison Between Hedonic And Matched Model Methods," Temi di discussione (Economic working papers) 547, Bank of Italy, Economic Research and International Relations Area.
    18. Pascal Petit & Luc Soete, 2002. "Is a Biased Technological Change Fuelling Dualism?," Chapters, in: Mark Setterfield (ed.), The Economics of Demand-Led Growth, chapter 15, Edward Elgar Publishing.
    19. Tomas Baležentis, 2014. "Total factor productivity in the Lithuanian family farms after accession to the EU: application of the bias-corrected Malmquist indices," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(4), pages 731-746, November.
    20. Doms, Mark & Forman, Chris, 2005. "Prices for local area network equipment," Information Economics and Policy, Elsevier, vol. 17(3), pages 365-388, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:rffdps:10814. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/rffffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.