German PC prices plummet by 34% annually due to quality adjustments.
The article examines how to accurately measure price changes in the computer industry by adjusting for changes in quality. By analyzing data from 1985 to 1994, the researchers found that quality-adjusted computer prices in Germany decreased by 34% annually, compared to a 7% decline in average prices. This shows that quality adjustments are crucial for accurately reflecting price movements. The study also found that German computer prices decreased more than those in the US, but when converted to US dollars, the decline was similar at around 30%.