Measuring innovations in the Japanese LCD TVs using market data

Quality-adjusted price indexes based on a discrete choice model and a weighted hedonic function are estimated using market data for Liquid Crystal Display (LCD) TVs obtained from a large Internet price comparison service in Japan. Implicit values of attributes were used to unify marginal values of attributes into a scalar quality measure, and thus, we measure innovations by the price shift while controlling the levels of the attributes. We also report estimates on welfare gains through the discrete choice approach.