How Fast Do Personal Computers Depreciate? Concepts and New Estimates

Mark Doms, Wendy E. Dunn, Stephen Oliner () and Daniel Sichel
Additional contact information
Wendy E. Dunn: https://www.federalreserve.gov/econres/wendy-e-dunn.htm

No 2003-20, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: This paper provides new estimates of depreciation rates for personal computers (PCs) using an extensive database on prices of used PCs. Our results show that PCs lose roughly half their remaining value, on average, with each additional year of use. We decompose that decline into age-related depreciation and a revaluation effect, where the latter effect is driven by the steep ongoing drop in the constant-quality prices of newly introduced PCs. Our results are directly applicable for measuring the depreciation of PCs in the National Income and Product Accounts (NIPA) and were incorporated into the December 2003 comprehensive NIPA revision. Regarding tax policy, our estimates suggest that the current tax depreciation schedule for PCs is about right in a zero-inflation environment. However, because the tax code is not indexed for inflation, the tax allowances would be too small in present value for inflation rates above the very low level now prevailing.

Keywords: Computers (search for similar items in EconPapers)
Pages: 58
Date: 2003-11-26
Note: Presented at the NBER Conference on Tax Policy and the Economy, Washington, DC, November 4, 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.frbsf.org/wp-content/uploads/wp03-20bk.pdf PDF - view (application/pdf)
https://www.frbsf.org/research-and-insights/public ... s-and-new-estimates/ FRBSF - view (text/html)
https://fraser.stlouisfed.org/title/working-papers ... new-estimates-639162 FRASER - view (text/html)

Related works:
Chapter: How Fast Do Personal Computers Depreciate? Concepts and New Estimates (2004)
Working Paper: How fast do personal computers depreciate? concepts and new estimates (2004)
Working Paper: How Fast Do Personal Computers Depreciate? Concepts and New Estimates (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfwp:2003-20

Ordering information: This working paper can be ordered from

DOI: 10.24148/wp2003-20

Access Statistics for this paper

More papers in Working Paper Series from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library ().