DP16556 Measuring Robot Quality: Has Quality Improvement Slowed Down?

Author(s): Ippei Fujiwara, Ryo Kimoto, Shigenori Shiratsuka, Toyoichiro Shirota
Publication Date: September 2021
Keyword(s): homothetic demand system, Quality adjustment, robots
JEL(s): C43, E22, E31, L15, O33
Programme Areas: Macroeconomics and Growth
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16556

This paper measures the extent to which the quality of robots has improved in Japan between 1990 and 2018, by using data from the "Production and Shipments of Manipulators and Robots" of the Japan Robot Association and the "Corporate Goods Price Index" of the Bank of Japan. We first calculate quality-unadjusted robot price indices applying three approaches: the traditional index number approach, the stochastic approach in the spirits of Edgeworth and Jevons, the structural approach. Then, we compute robot quality by dividing quality-unadjusted prices by the quality-adjusted industrial robot price index produced by the Bank of Japan. Based on the three approaches, significant decline in improvement in the quality of robots in the last decade is found. The differences in the growth rates of robot quality between the 2000s and 2010s show substantially negative values of around -3 percentage points per annum.