摘要：We develop a quality-adjusted cost index to estimate expected returns to investments innew technologies. The index addresses the problem of measuring social benefits from innovationsin service sector inputs, where real output is not directly observable. We forecast welfare gainsfrom two U.S. Advanced Technology Program innovations equaling 25%-50% of expected price,and aggregate consumer benefits of $1-$2 billion, relative to trends in existing technologies. Ourmodel's probabilistic parameters reflect uncertainty about prospective outcomes and in our hedonicestimates of shadow values for selected product attributes. The index can be readily adopted byresearch and development (R&D) managers in industry and government.
