Seasonality, consumer heterogeneity and price indexes: the case of prepackaged software
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- Copeland, A. J Prod Anal (2013) 39: 47. doi:10.1007/s11123-012-0266-2
This paper measures constant-quality price change for prepackaged software in the US using detailed and comprehensive scanner data. Because there is a large sales surge over the winter-holiday, it is important to account for seasonal variation. Using a novel approach to constructing a seasonally-adjusted cost-of-living price index that explicitly accounts for consumer heterogeneity, I find that from 1997 to 2003 constant-quality software prices declined at an average 15.9% at an annual rate. As a point of comparison, the Bureau of Labor Statistics reports average annual price declines of only 7.7% for prepackaged software.