Regular Article

Journal of Evolutionary Economics

, Volume 23, Issue 4, pp 889-908

Open Access This content is freely available online to anyone, anywhere at any time.

Welfare gain from quality and price development in the Japan’s LCD TV market

  • Satoshi NakanoAffiliated withThe Japan Institute for Labour Policy and Training
  • , Kazuhiko NishimuraAffiliated withFaculty of Economics, Nihon Fukushi University Email author 

Abstract

We estimate the welfare gain from innovations in the LCD TVs that prevailed during the period 2005–2007 in Japan, via consumer surplus that we measure with the aid of discrete choice methods, using market data obtained from an internet price comparison service (Kakaku.com). Further, by the measured implicit values of attributes, we evaluate in monetary terms, the qualitative transition embedded in the attributes through the iso-consumer surplus planes. We thereby disaggregate the welfare gain into the qualitative and the budgetary components, which we call the quality gain, and the budget gain, respectively. The estimates show, along with the evolved process of innovation, that the quality gain was in the order of 381 KJPY, while the budget gain was 94 KJPY negative, which gives about 287 KJPY of overall welfare gain per consumer, during the period.

Keywords

Innovation Measurement Discrete choice models Performance and Quality LCD TV

JEL Classification

D12 L15 O31 O33