TY  - JOUR
AU  - Doms,Mark E.
AU  - Dunn,Wendy E.
AU  - Oliner,Stephen D.
AU  - Sichel,Daniel E.
TI  - How Fast Do Personal Computers Depreciate? Concepts and New Estimates
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10521
PY  - 2004
Y2  - May 2004
UR  - http://www.nber.org/papers/w10521
L1  - http://www.nber.org/papers/w10521.pdf
N1  - Author contact info:
Mark Doms
Department of Commerce
Economics and Statistics Administration
E-Mail: mdoms@doc.gov

Wendy Dunn
E-Mail: wendy.e.dunn@frb.gov

Stephen D. Oliner
E-Mail: stephen.oliner@gmail.com

Daniel Sichel
 Federal Reserve Board
Mail Stop #66
20th and Constitution, NW
Washington, DC 20551
Tel: 202/452-2530
Fax: 202/452-5296
E-Mail: Dan.Sichel@frb.gov
M1  - published as Mark E. Doms, Wendy F. Dunn, Stephen D. Oliner, Daniel E. Sichel. "How Fast do Personal Computers Depreciate? Concepts and New Estimates," in James M. Poterba, editor, "Tax Policy and the Economy, Volume 18" MIT Press (2004)

AB  - This paper provides new estimates of depreciation rates for personal computers using an extensive database of prices of used PCs. Our results show that PCs lose roughly half their remaining value, on average, with each additional year of use. We decompose that decline into age-related depreciation and a revaluation effect, where the latter effect is driven by the steep ongoing drop in the constant-quality prices of newly-introduced PCs. Our results are directly applicable for measuring the depreciation of PCs in the National Income and Product Accounts (NIPAs) and were incorporated into the December 2003 comprehensive NIPA revision. Regarding tax policy, our estimates suggest that the current tax depreciation schedule for PCs closely tracks the actual loss of value in a zero-inflation environment. However, because the tax code is not indexed for inflation, the tax allowances would be too small in present value for inflation rates above the very low level now prevailing.
ER  -