This morning’s CPI report show that the price of wireless phone service is falling at an accelerating pace. That suggests the communications sector is becoming more and more important as a driving force for growth.
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[…] Wireless […]
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[…] BLS data on wireless phone service prices is also down, down, down. If we look at the three month moving average of price change as Michael Mandel did, we see prices decreasing nearly every month, on a year-on-year basis, since March 2003. Over the last year the rate of decrease has in fact accelerated. […]
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[…] BLS data on wireless phone service prices is also down, down, down. If we look at the three month moving average of price change as Michael Mandel did, we see prices decreasing nearly every month, on a year-on-year basis, since March 2003. Over the last year the rate of decrease has in fact accelerated. […]
Mandel on Innovation and Growth 
Curious stats. Time has also found it curious. Granted we have better phones, text messaging and stuff.
I assume the BLS is applying a hedonic adjustment; in other words, you’re still paying the same dollar figure, but getting so much more out of the service, so it’s effectively cheaper.
Wireless is not listed as one of the items that the BLS does hedonic adjustment on. Probably they are tracking the price of the same bundle of services–say vanilla flat-rate wireless.
An explanation for how the CPI measures cell phone prices can be found here.
So howcome my bill is not going down, and the services available are also barely increasing?
Sprint offers no more for $60/month than 5 years ago.
Apple’s iPhone contract monthly charge is the same as 3 years ago, with no more value included.
No? Your Sprint contract buys exactly the same amount of text messages, data, voice etc? I’m pretty sure not.
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