Consumers in durable goods markets are rational and forward looking

Are consumers forward looking? Evidence from used iPhones. Kanis Saengchote & Voraprapa Nakavachara. Applied Economics Letters, Pages 1-5. http://dx.doi.org/10.1080/13504851.2017.1380286

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 2.8–3.2% 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