Changing product quality, rapid technological progress, and short product life cycles make it difficult to compute indices that correctly reflect the true price movements of IT products. This paper assesses the differences between traditional and quality adjusted indices by providing results for...

"We compute quality-adjusted price indexes for Personal Digital Assistants (PDAs) for the period 1999-2004, using data on prices and characteristics of 203 models sold by 12 manufacturers. The PDA market is growing in size, it is technologically dynamic with very substantial changes in measured...