Consumer prices in Japan plummet as quality improvements drive down costs.
The study looked at how quality changes affect the prices of personal computers in Japan. By using a method called hedonic pricing, the researchers found that the prices of personal computers in Japan have been decreasing by 20-25% each year since 1990. This has led to a lower inflation rate for consumer durable goods and overall prices than what was previously estimated. This suggests that the real decrease in prices for consumer goods is much larger than what was thought before.