Are Consumers Forward-Looking? Evidence from Used iPhones

8 Pages Posted: 15 Jul 2017

See all articles by Kanis Saengchote

Kanis Saengchote

Department of Banking and Finance, Chulalongkorn Business School

Voraprapa Nakavachara

Faculty of Economics, Chulalongkorn University

Date Written: June 18, 2017

Abstract

This study examines the impact of planned obsolescence – the introduction of new models to make existing models obsolete – on secondary markets for mobile phones. Using data of over 320,000 used iPhones listings on Thailand’s largest online marketplace, we document that iPhone prices decrease with age, around 2.8 to 3.2 percent for each passing month. We find no evidence that the price decline accelerates after launches of new models (i.e. obsolescence), lending support to the view that consumer in durable goods markets are rational and forward-looking.

Keywords: durable goods, mobile phones, product obsolescence, forward-looking consumer

JEL Classification: D12, L19, L63

Suggested Citation

Saengchote, Kanis and Nakavachara, Voraprapa, Are Consumers Forward-Looking? Evidence from Used iPhones (June 18, 2017). Available at SSRN: https://ssrn.com/abstract=2999374 or http://dx.doi.org/10.2139/ssrn.2999374

Kanis Saengchote (Contact Author)

Department of Banking and Finance, Chulalongkorn Business School ( email )

Bangkok, 10330
Thailand

Voraprapa Nakavachara

Faculty of Economics, Chulalongkorn University ( email )

Bangkok 10330
Thailand

HOME PAGE: http://pioneer.netserv.chula.ac.th/~nvorapra/

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