IA Releases New Measure Of Inflation For Internet Goods And Q4 2018 Quarterly Indicators For The Internet Industry

HOOTON: “IA’s Digital Price Index shows that internet goods and services are responsive to consumer choice and aren’t moving in lockstep with broader pricing patterns.”

Washington, DC – Internet Association today released the Q4 2018 IA Industry Indicators Report (3I Report), which provides quarterly indicators for the internet sector. This quarter’s report features a deep-dive on IA’s Digital Price Index (DPI), which tracks inflation for digital goods and services.

“IA’s Digital Price Index shows that internet goods and services are responsive to consumer choice and aren’t moving in lockstep with broader pricing patterns,” said IA Chief Economist and Head of Research Dr. Christopher Hooton. “The DPI is an important new way of measuring internet goods and services over time, and we’re excited to share a deeper dive on it in this quarter’s 3I report.”

Key findings from this issue of the 3I Report, which draws on data from Q4 2018, include:

• Internet services are not a universal depressor of overall prices. Online prices for the typical services individuals use may actually increase faster than national prices.
• Consumer choice is critical when it comes to the internet. A change in price for a single service can have a large impact on the overall costs for consumers.
• Hiring is up 10 percent and separations are down 9.6 percent, indicating strong employment growth for the internet companies in Q4 2018.

“Economic & Financial Conditions” and “Security & Data Privacy” are top concerns for publicly-traded tech companies. The internet sector cited risks related to “Economic & Financial Conditions” in approximately 23 percent of all reported risks cited in Q4 2018, up 6 percent from a year ago. Fifteen percent of companies cited “Security & Data Privacy” as a risk factor, also up 6 percent from a year ago.

“Q4 2018’s strong hiring and separations numbers also demonstrate the continued health of the internet sector as a whole,” Hooton concluded.

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