Hedonic Price Indexes for Personal Computer Operating Systems and Productivity Suites

Results of hedonic price regressions for personal computer operating systems and productivity suites advertised in PC World magazine by retail vendors during the time period 1984 to 2000 are reported. Among the quality attribute variables we use are new measures capturing the presence of network effects in personal computer operating systems, such as connectivity and compatibility, and product integration among components of productivity suites. Average annual growth rates of quality-adjusted prices of personal computer operating systems range from -15 to -18 percent, while those for productivity suites generally range between -13 and -16 percent. Price declines are generally greater in the latter half of the samples.