This is not the first time there has been a steady growth in the quality of the means of production while at the same time a decrease in its cost. Steam power was initially expensive and of low quality and as we all know it later became ubiquitous in certain sectors both because its quality improved and cost came down. What makes computers so different that they require "hedonic" pricing?
Would not some review of the capital controversy help to think through what is at stake here?
Travis
Subject: Re: [lbo-talk] hedonic pricing update
> Miles Jackson wrote:
>
> >On Fri, 6 Feb 2004, Doug Henwood wrote:
> >
> >> The BEA still stands by its hedonic
> >> technique.
> >>
> >> Doug
> >>
> >
> >I'm reading Doug's book,
>
> And I love you for it!
>
> > and the more I find out about
> >this "hedonic pricing", the more it smells.
> >
> >1. They don't apply this logic consistently
> >for all technological innovations. Why just
> >computers?
>
> The do apply it to a few other products, but computers are probably
> the commodity that "needs" the technique the most. I sympathize with
> what they're trying to do - clearly this year's $1,000 computer is
> worth more than last year's, but the question is just how much? I
> don't think it's just a matter of its physical stats - there has to
> be some better way to measure "real" output.
>
> I just read that the BEA is investigating the application of hedonics
> to medical care prices. With all those "quality" improvements,
> medical care inflation could be a thing of the past.
>
> >True, this hedonic pricing stuff is not
> >very sexy, but the devil (and the ideology)'s
> >in the details. I want to thank Doug for
> >highlighting this.
>
> My pleasure!
>
> Doug
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