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The Increasing Deflationary Influence of Consumer Digital Access Services

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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.

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  • David M. Byrne & Carol Corrado, 2020. "The Increasing Deflationary Influence of Consumer Digital Access Services," Finance and Economics Discussion Series 2020-021r1, Board of Governors of the Federal Reserve System (U.S.), revised 05 Mar 2020.
    • Handle: RePEc:fip:fedgfe:2020-21
    DOI: 10.17016/FEDS.2020.021r1
    Note: Revision
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    2. Mattsson, Pontus & Reshid, Abdulaziz, 2023. "Productivity divergence and the role of digitalisation," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 942-966.
    3. Carol Corrado & Jonathan Haskel & Massimiliano Iommi & Cecilia Jona-Lasinio & Filippo Bontadini, 2024. "Data, Intangible Capital, and Productivity," NBER Chapters, in: Technology, Productivity, and Economic Growth, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Price measurement; Consumer digital services; Innovation; Information and Communication Technology (ICT); National accounting;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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