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The Digital Economy, New Products and Consumer Welfare

Walter Diewert (), Kevin J. Fox Fox and Paul Schreyer working papers from Vancouver School of Economics

Abstract: Benefits of the Digital Economy are evident in everyday life, but there are significant concerns that these benefits may not be appropriately reflected in official statistics. Statistical agencies are typically unable to measure the benefits that result from introduction of such new goods and services. The measurement of the net benefits of new and disappearing products depends on what type of index the statistical agency is using to deflate final demand aggregates. We examine this measurement problem when the agency uses any standard price index formula for its deflation of the value aggregate, such as GDP. An Appendix applies the methodology to the problem of measuring the effects of product substitutions for disappearing items.

Keywords: Maximum overlap indexes; Hicksian reservation prices; Laspeyres; Paasche; Fisher and Törnqvist price indexes (search for similar items in EconPapers)
JEL-codes: C43 D11 D60 E01 E31 O31 O47 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac, nep-mkt and nep-pay
Date: 2017-12-14, Revised 2017-12-14
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