The Increasing Deflationary Influence of Consumer Digital Access Services

23 Pages Posted: 18 May 2020

See all articles by David M. Byrne

David M. Byrne

Board of Governors of the Federal Reserve System

Carol A. Corrado

The Conference Board; Georgetown University - Center for Business and Public Policy

Multiple version iconThere are 2 versions of this paper

Date Written: March 3, 2020

Abstract

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

Byrne, David M. and Corrado, Carol A., The Increasing Deflationary Influence of Consumer Digital Access Services (March 3, 2020). FEDS Working Paper No. 2020-021 https://doi.org/10.17016/FEDS.2020.021 , Available at SSRN: https://ssrn.com/abstract=3601252

David M. Byrne (Contact Author)

Board of Governors of the Federal Reserve System ( email )

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Carol A. Corrado

The Conference Board ( email )

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New York, NY 10022
United States
202-340-0252 (Phone)

Georgetown University - Center for Business and Public Policy ( email )

Washington, DC 20057
United States

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