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A Hedonic Approach to Testing for Indirect Network Effects in the LCD Television Market
Applied Economics Letters (2013)
  • Jeffrey A Livingston
  • Ortmeyer David
  • Patrick A Scholten
  • Wilson Wong
Abstract

Using data from CNet's Shopper's.com on prices and television characteristics, we use a quality-adjusted, hedonic price regression to test for the presence of indirect network effects in the television market. In 2009, broadcasters were mandated to cease programme transmission using analog signals, and convert to digital signal transmission, necessitating changes to the reception mechanisms themselves, televisions. Digital signal transmission permits broadcasters to offer greater programming variety, which makes televisions more valuable to consumers. Similarly, the presence of adapters on televisions enables compatibility with a multitude of complementary devices, also increasing consumers' values of televisions. Our results are consistent with the presence of indirect network effects arising from each of these sources.

Publication Date
January, 2013
Citation Information
Jeffrey A Livingston, Ortmeyer David, Patrick A Scholten and Wilson Wong. "A Hedonic Approach to Testing for Indirect Network Effects in the LCD Television Market" Applied Economics Letters Vol. 20 Iss. 1 (2013)
Available at: http://works.bepress.com/jeffrey_livingston/17/