On Thu, 2008-06-19 at 19:56 -0400, Max B. Sawicky wrote: > There is no "hedonic GDP" that I'm aware of. There are different price > indices that > can be used to deflate nominal GDP to get "real" measures. The > difficulty of measuring > real computer prices should be clear.
Yes all countries include quality factor for price indexes or GDP deflator, but that's not what I was refering too here. There are many pages on the web refering to another adjustment inflating the nominal price when counting in GDP in the USA only, none of those I found are authoritative hence my question about it :). Two examples: http://en.wikipedia.org/wiki/GDP_deflator << In recent years, some commentators have expressed concern that the national accounts may overstate spending on computer hardware because of the way the hedonic index and implicit price deflator are used. It is well-known that the prices of a unit of processor speed, a unit of memory, and a unit of hard drive capacity have declined very quickly since 1995. Therefore, the current-year (say, 2003) price deflator for an entire computer - using the hedonic method - is less than one relative to a base year of 1995. This means that when nominal spending on computer hardware is divided by the deflator to give real spending on computers, the number rises. (The "deflator" here is actually an inflator!) From the second quarter of 2000 through the fourth quarter of 2003, the government estimated that real tech spending rose from $446 billion to $557 billion, when nominal spending only increased to $488 billion. Some analysts feel that this overstates the "true" spending on computers by $72 billion.[citation needed] However, it is also true that this extra $72 billion captures the increase in value and utility of the computers that were purchased in 2003 as compared to 2000, due to the former's superior quality and capability for the same nominal price as the latter. >> http://globaleconomicanalysis.blogspot.com/2005/05/grossly-distorted-procedures.html << My biggest gripe with hedonics however, is not with CPI calculations but as applied to the GDP. That computer that sold for $1000 two years ago might sell for $800 today and have more memory and a faster CPU as well. Yes that is price DEFALTION for sure and perhaps needs to be adjusted in the CPI but is that any reason to adjust the GDP and say we sold more computers in 2005 although price wise sales were REALLY down? The logical answer is no, although that is not what we do. I contacted the BEA today asking for the latest hedonic and imputation measurements. They pointed me to some online articles and tables and emailed me an Excel spreadsheet. Unfortunately the figures are severely behind and the latest numbers for imputations was from 2003. The most current figure I have for hedonic adjustment to the GDP is 2.257 TRILLION dollars which is roughly 22% of the GDP. To the best of my knowledge the US is the only major country that hedonically adjusts its GDP. I believe Japan was recently considering using hedonic GDP estimates but I am not sure of the final outcome. To me, price is price and sales are sales as far as GDP is concerned. To say that we sold 50% more "whatever" in 2005 than 2004 although actual PRICE sales of "whatever" have dropped seems absurd. >> I haven't contacted the BEA (I'm a french citizen :), may be someone has an authoritative answer? BTW I've also been unable to find detalied price quality adjustment data (for any country USA, France, etc...). I assume since it has been going on for more than a decade, these adjustments should now represent quite an awful lot of "real GDP" growth, all totally opaque and purely government generated without any oversight by citizens. Thanks! Laurent _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
