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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (58782)	9/9/2000 1:02:30 PM
From: KyrosL	Read Replies (2) \| Respond to of 99985

Interesting article in Barron's on hedonic pricing interactive.wsj.com It turns out that hedonic pricing causes a very modest increase in the US GDP. For example, without hedonic pricing, second quarter GDP growth would have been 5.7% instead of the reported 6.0%. Moreover, hedonic pricing is NOT used for a plethora of goods and services where quality has improved dramatically over the last few years -- TVs, video cameras, VCRs, etc. Reading the FT article, one gets the impression that hedonic pricing results in a large upward adjustment in the US GDP. The article sites the absolute magnitude of hedonic adjustment on the only product where this method is used -- computers -- and completely fails to point out that computers make up only a relatively small portion of the GDP (and consumer price index). Kyros