Hedonic pricing and lousy customer service

Jane Galt tells a sad tale about trying to deal with Dell. Doesn’t this sort of thing belong in the hedonic price indices?

Remember when the Boskin Commission magically made inflation go down and productivity and real economic growth go up by doing hedonic price adjustments? The principle is straightforward: if I get a better machine this year for the same money, that’s like a price cut. But I had my doubts about some of the details.

In particular, what’s the hedonic adjustment for rotten customer service? More generally, sellers have offloaded lots of cost and work onto consumers by replacing customer service with voicemail jail and incomprehensible websites. That ought to call for a hedonic price adjustment the other way, but I somehow doubt those adjustments are being made.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com