Chained, exact and superlative hedonic price changes: estimates from microdata
AbstractScanner data are used to calculate chained, exact (and superlative) hedonic price indexes for television sets. The data source is available for a wide range of goods, the application providing an example of how this method can be more widely applied. The indexes correspond to constant utility, hedonic cost-of-living indexes. The approach improves on the existing direct method, which takes its estimates directly from the coefficients on time dummies in a hedonic regression. It also improves on the matched model method used by statistical agencies. The differences between actual price changes and exact hedonic quality-adjusted price changes are found to be substantial. Base-period and current-period weighted exact hedonic indexes are similar, thus providing good approximations to a superlative index. Estimates from the direct, dummy variable approach were compared to the superlative indexes. The disparities between the results argue for caution in the use of the direct, dummy variable approach to estimating quality-adjusted price changes.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 35 (2003)
Issue (Month): 9 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RAEC20
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Feenstra, R.C., 1995.
"Exact Hedonic Price Indexes,"
Department of Economics
95-11, California Davis - Department of Economics.
- Arguea, N M & Hsiao, C & Taylor, G A, 1994.
"Estimating Consumer Preferences Using Market Data--An Application to U.S. Automobile Demand,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 9(1), pages 1-18, Jan.-Marc.
- Arguea, N.M. & Hsiao, C. & Taylor, G.A., 1993. "Estimating Consumer Preferences Using Market Data - An Application to U.S. Automobile Demand," Papers 9316, Southern California - Department of Economics.
- White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
- Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
- Gordon, Robert J., 1990. "The Measurement of Durable Goods Prices," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226304557.
- Katharine G. Abraham & John S. Greenlees & Brent R. Moulton, 1998. "Working to Improve the Consumer Price Index," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 27-36, Winter.
- Brent R. Moulton & Karin E. Moses, 1997. "Addressing the Quality Change Issue in the Consumer Price Index," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1), pages 305-366.
- W. Erwin Diewert, 1997. "Alternative strategies for aggregating prices in the CPI - commentary," Review, Federal Reserve Bank of St. Louis, issue May, pages 127-138.
- Zvi Griliches, 1988.
"Hedonic Price Indexes and the Measurement of Capital and Productivity: Some Historical Reflections,"
NBER Working Papers
2634, National Bureau of Economic Research, Inc.
- Zvi Griliches, 1991. "Hedonic Price Indexes and the Measurement of Capital and Productivity: Some Historical Reflections," NBER Chapters, in: Fifty Years of Economic Measurement: The Jubilee of the Conference on Research in Income and Wealth, pages 185-206 National Bureau of Economic Research, Inc.
- Diewert, W Erwin, 1978. "Superlative Index Numbers and Consistency in Aggregation," Econometrica, Econometric Society, vol. 46(4), pages 883-900, July.
- Matthew D. Shapiro & David W. Wilcox, 1997.
"Alternative Strategies for Aggregating Prices in the CPI,"
NBER Working Papers
5980, National Bureau of Economic Research, Inc.
- Matthew D. Shapiro & David W. Wilcox, 1997. "Alternative strategies for aggregating prices in the CPI," Review, Federal Reserve Bank of St. Louis, issue May, pages 113-125.
- W. Erwin Diewert, 1995. "Axiomatic and Economic Approaches to Elementary Price Indexes," NBER Working Papers 5104, National Bureau of Economic Research, Inc.
- Gandal, Neil, 1995. "Competing Compatibility Standards and Network Externalities in the PC Software Market," The Review of Economics and Statistics, MIT Press, vol. 77(4), pages 599-608, November.
- Nelson, Randy A & Tanguay, Tim L & Patterson, Christopher D, 1994. "A Quality-Adjusted Price Index for Personal Computers," Journal of Business & Economic Statistics, American Statistical Association, vol. 12(1), pages 23-31, January.
- Robert J. Gordon, 1990. "The Measurement of Durable Goods Prices," NBER Books, National Bureau of Economic Research, Inc, number gord90-1.
- Silver, Mick, 1995. "Elementary Aggregates, Micro-indices and Scanner Data: Some Issues in the Compilation of Consumer Price Indices," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 41(4), pages 427-38, December.
- Varela-Irimia, Xosé-Luís, 2011.
"Age effects, unobserved characteristics and hedonic price indexes: The Spanish car market in the 1990's,"
2072/169683, Universitat Rovira i Virgili, Department of Economics.
- Xosé-Luís Varela-Irimia, 2011. "Age effects, unobserved characteristics and hedonic price indexes: The Spanish car market in the 1990?s," Working Papers XREAP2011-11, Xarxa de Referència en Economia Aplicada (XREAP), revised Aug 2011.
- Toshihiro Okubo, 2013. "Energy-saving regulations and commodity prices," Environmental Economics and Policy Studies, Society for Environmental Economics and Policy Studies - SEEPS, vol. 15(1), pages 93-132, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.