The Mysterious Cross-Country Dispersion in Mobile Phone Price Trends

Posted: 22 Oct 2019

See all articles by David M. Byrne

David M. Byrne

Board of Governors of the Federal Reserve System

Date Written: 2019-08-05

Abstract

Mobile phones have been central to ICT innovation since the introduction of the smartphone and constant-quality prices are a barometer of their economic impact. Official consumer price indices (CPIs) indicate that impact differs wildly across countries: For the 2008-2018 period, average annual rates of mobile phone inflation range from no change to a 25 percent decline among 12 key countries examined in this paper. Although evidence indicates certain fundamental factors are at play, mis-measurement may lead the spread in rates to be overstated. Examination of methods employed in CPI calculation, including quality adjustment and index formulas, illuminates but does not resolve the mystery.

Suggested Citation

Byrne, David M., The Mysterious Cross-Country Dispersion in Mobile Phone Price Trends (2019-08-05). FED Notes No. 2019-08-05. Available at SSRN: https://ssrn.com/abstract=3473076 or http://dx.doi.org/10.17016/2380-7172.2413

David M. Byrne (Contact Author)

Board of Governors of the Federal Reserve System ( email )

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