Date

2014

Department or Program

Economics

Additional Department or Program (if any)

Mathematics

Primary Wellesley Thesis Advisor

Dan Sichel

Abstract

A microprocessor contains the central processing unit and takes the role of the “brain” for a computer. For the past decades, we have benefited greatly from its technological improvement. To accurately measure the contribution of such technological improvement to economic growth, we need a quality adjusted price index, which also helps us understand quality and technology trends in microprocessors. The quality trend in desktop microprocessors has been extensively studied. I focus on microprocessors for laptops for my senior economics thesis. Using data I newly collected on laptop microprocessor prices and performance metrics, I construct a quality adjusted price index spanning the past ten years. Across a range of empirical specifications, I find a sharp decrease in quality adjusted price over 2004-2013, but smaller in magnitude since 2010. These results might suggest a different technological improvement pattern and/or changing pricing strategies in the laptop microprocessor segment of the industry.

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