Innovating to Equality : The Egalitarian Distribution of Welfare from the Rise of Consumer Electronics

Consumers have benefited from decades of technological improvement in electronics, yet the distribution of their welfare gains are unexamined, despite interest in other measures of inequality. In this paper, I examine the welfare gains to different income cohorts from the development of multiple categories of electronic products. Income dependent preferences are estimated in a dynamic model of demand. Key utility parameters, unique to income cohort, are identified from moments created using micro-level data containing purchase and demographic information. My results suggest that the benefits from the rise of electronics products may be far more egalitarian than conventional measures of inequality. Welfare gains to consumers in the bottom third of the US income distribution average approximately $1,000, while gains to the top third benefit are about $2,500. This is twice as equal as related measures of consumption inequality