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A Quality-Adjusted Cost Index for Estimating Future Consumer Surplus from Innovation AgEcon
Austin, David H.; MacAuley, Molly K..
This paper describes a model for estimating, in a probabilistic framework, expected future consumer surplus from planned new product innovations. The model has been applied to estimations of taxpayer benefits from NASA's New Millenium Program (NMP), which develops new technologies for space science, and to the digital data storage technologies being supported by the Department of Commerce's Advanced Technology Program (ATP). The model uses cost index methods based on consumers' estimated marginal valuation for quality improvements in the technology. Probabilistic values for performance increases are taken from the innovators' own expectations. The analysis reveals the sensitivity of welfare increases to these values, which are assumed to be biased upward....
Tipo: Working or Discussion Paper Palavras-chave: Quality-adjusted cost index; Consumer surplus; Innovation; Environmental Economics and Policy; O32; H43; D60.
Ano: 1998 URL: http://purl.umn.edu/10655
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Estimating Future Consumer Welfare Gains from Innovation: The Case of Digital Data Storage AgEcon
Austin, David H.; MacAuley, Molly K..
We develop a quality-adjusted cost index to estimate expected returns to investments in new technologies. The index addresses the problem of measuring social benefits from innovations in service sector inputs, where real output is not directly observable. We forecast welfare gains from two U.S. Advanced Technology Program innovations equaling 25%-50% of expected price, and aggregate consumer benefits of $1-$2 billion, relative to trends in existing technologies. Our model's probabilistic parameters reflect uncertainty about prospective outcomes and in our hedonic estimates of shadow values for selected product attributes. The index can be readily adopted by research and development (R&D) managers in industry and government.
Tipo: Working or Discussion Paper Palavras-chave: Quality-adjusted cost index; Consumer surplus; Innovation; Research and Development/Tech Change/Emerging Technologies; O32; H43; D60.
Ano: 2000 URL: http://purl.umn.edu/10814
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