Quality-Adjusted Price Indexes for Communications Equipment Excel

Sources and Methods

Price index calculation sources and methods by product class

Product Class	Sources and Methods
Telephones	1987-1997: TIA telephone unit value with 8.5 ppt bias-adjustment from 2003-2006 overlap with CTA index. 1997-2006: Fisher chain-weighted matched model index of product class unit values from CTA. 2007-last year: Matched-model index using Dell'Oro worldwide quarterly-frequency revenue and unit data for 5 types of phones, by vendor, with 6.5 ppt bias-adjustment from 2003-2006 overlap with CTA index.
Fax machines	1989-1996, 2007-2012: TIA average price bias-adjusted using 1996-2007 overlap (5.4 percentage points). 1996-2002: Matched-model index based on [provider name withheld] U.S. market revenue and units for four technology classes. 2002-2007: Matched-model index based on [provider name withheld] U.S. market quarterly-frequency revenue and units by model. 2007-last year: Average rate for 2009-2012 period.
Modems	Analog 1987-1989: Matched-model index using Census Current Industrial Report annual-frequency revenue and units for 4 speed classes. 1989-1998: Doms (2005) 1998-2009: BEA computer investment deflator used as indicator. Broadband 1987-1998: N/A 1998-last year: Matched model index using Dell'Oro quarterly-frequency revenue and units, cable, DSL, and PON modems (7 technologies), by vendor.
Message equipment & miscellanous terminals	1987-1998: TIA ave. price of answering machines, bias-adjusted relative to 1998-2006. 1998-2006: Geomean of price indexes based on data from CTA and from [provider name withheld]. CTA index: Matched-model index for voice message systems, U.S. market revenue and units for answering devices, with and without integrated telephones, monthly-frequency data. [provider name withheld] index: matched-model index using revenue and units, worldwide market for contact center systems, 6 size classes. 2007-2012: TIA ave. price of answering machines, bias-adjusted relative to 1998-2006. 2012-last year: Ave. rate, 2007-2012.
Data networking	1987-1992: BEA computer investment price index 1992-1995: FRB research—annual indexes for routers, switches, and hubs. Routers: ave. rate of change for 1996-1999. Switches (1992-1996): price per port index using [provider name withheld] data bias-adjusted using Doms-Forman (2005) results. Hubs: matched-model, [provider name withheld] data—annual for world market, unit value for 7 types. 1995-2000: FRB research indexes for routers, switches, hubs reported in Doms-Forman (2005). Routers: annual-frequency hedonic index using Cisco model list prices for U.S. market and product characteristics from Cisco catalogs. Switches (1996-2000): annual-frequency hedonic index using list prices and product characteristics for models from Cisco and other companies from "Comparison Columns" reports published by [provider name withheld]. Hubs: matched-model, [provider name withheld] data—annual for world market, unit value for 7 types. [LAN card index out of scope.] 2000-latest year: FRB research indexes for routers, ethernet switches, SAN switches, wireless LAN equipment. Routers: matched-model index using Dell'Oro worldwide market quarterly-frequency data for 3 types by vendor—unit value for access (high/low), price per capacity (MBps) for high-end. Ethernet switches: matched-model index using Dell'Oro worldwide market quarterly-frequency data for 9 types by vendor—price per capacity (MBps). SAN switches: matched-model index using quarterly-frequency Dell'Oro worldwide market data for four types by vendor—price per port. WLAN data: matched-model index using quarterly-frequency Dell'Oro worldwide market data for 5 types further divided by 802.11 technology by vendor—price per unit.
Legacy central office switching equipment	1987-1993: Hedonic index for digital circuit switching equipment, Currie (2005). 1993-2006: Matched-model index using [provider name withheld] U.S. market annual-frequency data on three types of equipment, data on revenue and lines. 2007-2012: Matched-model index using Dell'Oro worldwide market quarterly-frequency data on revenue and channels. 2013-last year: Extended using average rate, 2007-2012.
Business voice switching equipment	1987-1994: Central office index used as indicator. 1994-2001: Matched-model index using [provider name withheld] worldwide market annual-frequency data on revenue and lines for 16 types of equipment. 2001-last year: Matched-model index using Dell'Oro worldwide market quarterly-frequency data on revenue and units for 15 types of equipment, revenue and units for 5 types of phones.
Local loop transmission equipment	1987-1993: Central office index used as indicator. 1993-1998: Matched-model index using [provider name withheld] worldwide market annual frequency data on revenue and units for 17 product types. 1998-last year: Matched-model index using Dell'Oro worldwide market quarterly-frequency data on revenue and ports for 7 product types, by vendor.
Fiber optic long-haul transmission equipment	1987-1993: Central office index used as indicator. 1993-1998: Research index from Doms (2005). 1998-last year: Matched-model index using Dell'Oro worldwide market quarterly-frequency data on revenue and capacity for 4 product types (switch, SONET, DWDM longhaul, WDM metro), by vendor.
Legacy long-haul transmission equipment	1987-1995: Central office index used as indicator 1996-last year: 1/2 the growth rate of the fiber transmission index.
Cell phones	1983-1990: Hausman (1995) ave. rate, -16.9 percent. 1990-1995: Matched-model index using price listings from Radio Shack catalogs for 12 models. 1995-2002: Matched-model index using [provider name withheld] U.S. market annual-frequency revenue and units, 16 types. 2002-2006: Hedonic price index using quarterly-frequency data, Watanabe (2010). 2006-2009: Ave. rate, 2003-2006 2009-2014: Matched-model price index using used cell phone prices from Phoneraiser, adjusted for depreciation. 2014-2016: Ave. rate 2011-2014
Cellular network equipment	1987-1992: Ave. rate 1984-2016 2000-last year: Matched-model index using Dell'Oro worldwide market quarterly-frequency revenue and for 5 channel access technologies by 3 size classes, by vendor
Satellites	1987-2010: FRB research index based on price per unit of transmission capacity using data from Futron and TSE. See Byrne and Corrado (2015). 2010-last year: Ave. rate, 2000-2010
Satellite network equipment	1987-last year: 1/2 growth rate of cellular networking equipment price index.
Miscellaneous/other wireless equipment	1987-last year: 1/2 growth rate of cellular networking equipment price index.
Studio & broadcast equipment	1987-1993: Geomean of (1) BOJ producer price index for video production equipment and (2) 1/4 telecommunications cost index (see Byrne and Corrado (2016). 1993-last year: Geomean of (1) BOJ producer price index for video production equipment and (2) 1/2 growth rate of cellular networking equipment price index.
Intercom systems	1987-last year: BLS producer price index.
Alarm systems	1987-last year: BLS producer price index.
Traffic signal equipment	1987-last year: BLS producer price index.

Abbreviations

Abbreviation	Definition
Futron	Futron, Inc.
BEA	U.S. Bureau of Economic Analysis.
BLS	U.S. Bureau of Labor Statistics.
BOJ	Bank of Japan.
Census	U.S. Census Bureau.
CTA	Consumer Technology Association, formerly known as Consumer Electronics Association.
Dell'Oro	Dell'Oro Group, Inc.
FRB	Board of Governors of the Federal Reserve System.
Phoneraiser	Phoneraiser.com.
TIA	Telecommunications Industry Association.
TSE	The Satellite Encyclopedia.

References

Byrne, David M., and Carol A. Corrado. (2017) "ICT Services and their Prices: What do they tell us about Productivity and Technology." International Productivity Monitor (29, forthcoming)

Byrne, David M., and Carol A. Corrado. (2015) "Prices for communications equipment: Rewriting the record." Available at: https://www.federalreserve.gov/econresdata/feds/2015/files/2015069pap.pdf

Currie, Kent A. "Hedonic Prices for Digital Circuit Switching Equipment: 1980-1998", working paper.

Doms, Mark, and Chris Forman. (2005) "Prices for local area network equipment." Information Economics and Policy 17, no. 3: 365-388.

Doms, Mark. (2005) "Communications Equipment: What Has Happened to Prices?." In Measuring Capital in the New Economy, pp. 323-362. University of Chicago Press.

Flamm, Kenneth. (1989) "Technological advance and costs: computers versus communications." Changing the rules: Technological change, international competition, and regulation in communications: 13-61.

Gordon, Robert J. (2007) The Measurement of Durable Goods Prices. University of Chicago Press.

Grimm, Bruce T. (1997) “Quality-Adjusted Price Indexes for Digital Telephone Switches.” Memorandum (Bureau of Economic Analysis, May 20).

Hausman, Jerry. (1999) "Cellular telephone, new products, and the CPI." Journal of Business & Economic Statistics 17, no. 2: 188-194.

Watanabe, Naoki, Ryo Nakajima, and Takanori Ida. (2010) "Quality-adjusted prices of Japanese mobile phone handsets and carriers’ strategies." Review of Industrial Organization 36, no. 4: 391-412.

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