Technological Progress on Consumption side: Consolidation and Prevalence of Complements
Abhay Gupta ()
MPRA Paper from University Library of Munich, Germany
Abstract:
This paper discusses the effect of technological innovation on consump- tion side. Apart from Quality effect (improvement in the quality of service or reduction in constant-quality price), there is another ”Consolidation effect”. This takes form of more features (which can be enjoyed together) being included in the same service. This effect is driven by the Time-constraint in form of technological limit on consumption per unit of time. The effect is stronger if features being bundled together are complementary to each other. Another aspect is shown by offering an alternative explanation of Engel’s Law. If complementarity of a sector is affected by technological externalities, the income share spent on that sector changes. The direction of movement depends whether the tech progress has developed ”enhancing” (positive) or ”impeding” (negative) complements. Service sector has more of these en- hancing complements and hence income share spent on service sector has gone up.
JEL-codes: D62 L80 O31 O33 (search for similar items in EconPapers)
Date: 2006-09
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/8998/1/MPRA_paper_8998.pdf original version (application/pdf)
Related works:
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:pra:mprapa:8998
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().