The mysterious cross-country dispersion in mobile phone price trends

| Publication date: 24 Jul 2019 | External Author(s): Byrne, D M | JEL Classification: E31, O57 | Journal: National Institute Economic Review Issue 249 | Publisher: Sage Publications, London

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 2008–18 period, average annual rates of mobile phone inflation range from no change to a 25 per cent 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.

Keyword tags: 
price indexes
information and communications technology