A Computer Software Price Index Using Scanner Data

In the last 20 years, the expenditure share of prepackaged software in the national output has grown. The large number of characteristics in computer software make hedonic regression techniques impractical for purposes of controlling for quality changes. In this study, matched model price indices are constructed using monthly scanner data on prices and unit values for various prepackaged computer software titles and categories sold in Canada from January 1996 to June 2000. Quality differences are controlled for by applying the maximum overlap method. Results show that prices declined during the period studied at an average annual rate of 5.9%