The Increasing Deflationary Influence of Consumer Digital Access Services
23 Pages Posted: 18 May 2020
Date Written: March 3, 2020
Consumer digital access services — internet, mobile phone, cable TV, and streaming — accounted for over 2 percent of U.S. household consumption in 2018. We construct prices for these services using direct measures of volume (data transmitted, talk time, and hours of programming). Our price index fell 12 percent per year from 1988 to 2018 while official prices moved up modestly. Using our digital services index, we estimate total personal consumption expenditure (PCE) prices have risen nearly 1/2 percentage point slower than the official index since 2008. Importantly, the spread between alternative and official PCE price inflation has increased noticeably over time.
Keywords: Innovation; National accounting; Consumer digital services; Price measurement; Information and Communication Technology (ICT)
JEL Classification: O33; L86; E31
Suggested Citation: Suggested Citation