RE: http://slate.msn.com/economics/00-02-09/economics.asp
I read the Landsburg column, but I haven't read the original study he is commenting
on. Given that, Landsburg's account of the idea seems totally nutz to me. Why would we
assume that the relative price of quality vs quantity should remain the same over time
(that has to be the underlying assumption that makes sense of the analysis that is
being done). Doesn't it seem obvious that the manufacturing revolution of the early to
mid 20th century reduced the relative cost of quantity (look at how the use of craft
work in buildings dropped in favor of simple machine honed moldings for example and
how mass produced plastic ticky-tacky replaced crafted pottery and dishes) while the
information revolution seems to be reversing that trend and decreasing the relative
cost of quality (by making more customization possible)? If I'm right that would mean
that the method that Landsburg wants to use would grossly overstate productivity
growth for the first 70 years of the 20th century (where !
the price of quality is underestimated and the trend is ignored). Its hard to say
whether its under estimated or over estimated since then. -- Bill Dickens
William T. Dickens
The Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC 20036
Phone: (202) 797-6113
FAX: (202) 797-6181
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AOL IM: wtdickens
