IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v42y2010i15p1973-1994.html
   My bibliography  Save this article

Econometric issues in hedonic price indices: the case of internet service providers

Author

Listed:
  • Kam Yu
  • Marc Prud'homme

Abstract

Researchers in hedonic studies frequently encounter the problems of the choice of functional forms, the use of pooled regression using time dummies vs period to period regression, and the unit of measurement of the product. This article examines these issues through the study of Internet service providers in Canada from 1993 to 2000. A series of tests are employed to evaluate the best procedure. We find that the commonly used log-linear equation with period to period regression and hourly rate charged gives a robust result compared with the more flexible translog function. The quality-adjusted price index declines at about 15% per year.

Suggested Citation

  • Kam Yu & Marc Prud'homme, 2010. "Econometric issues in hedonic price indices: the case of internet service providers," Applied Economics, Taylor & Francis Journals, vol. 42(15), pages 1973-1994.
    • Handle: RePEc:taf:applec:v:42:y:2010:i:15:p:1973-1994
    DOI: 10.1080/00036840701748995
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00036840701748995
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036840701748995?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Marco Haan, 2001. "The Economics of Free Internet Access," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 157(3), pages 359-379, September.
    2. repec:dgr:rugsom:00f49 is not listed on IDEAS
    3. Fisher, Franklin M. & Shell, Karl, 1972. "The Economic Theory of Price Indices," Elsevier Monographs, Elsevier, edition 1, number 9780122577505 edited by Shell, Karl.
    4. Brian Staihr, 2000. "The broadband quandary for rural America," Main Street Economist, Federal Reserve Bank of Kansas City, issue Aug.
    5. W. Erwin Diewert, 1995. "Axiomatic and Economic Approaches to Elementary Price Indexes," NBER Working Papers 5104, National Bureau of Economic Research, Inc.
    6. Hillary, N. & Baldwin, G., 1999. "Challenges facing Canada's Internet Services Providers; a Snapshot from a Survey of ISPs," Papers 28, Statistique Canada, Sciences et technologie-.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Oleksiy Kryvtsov, 2016. "Is there a quality bias in the Canadian CPI? Evidence from microdata," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(4), pages 1401-1424, November.
    2. Yun, Seong Hun & Kim, Yongjae & Kim, Minki, 2019. "Quality-adjusted international price comparisons of mobile telecommunications services," Telecommunications Policy, Elsevier, vol. 43(4), pages 339-352.
    3. Byrne, David M. & Corrado, Carol A., 2020. "The increasing deflationary influence of consumer digital access services," Economics Letters, Elsevier, vol. 196(C).
    4. Julian Granna & Wolfgang Brunauer & Stefan Lang, 2022. "Proposing a global model to manage the bias-variance tradeoff in the context of hedonic house price models," Working Papers 2022-12, Faculty of Economics and Statistics, Universität Innsbruck.
    5. Arnold, René & Waldburger, Martin & Morasch, Bastian & Schmid, Frieder & Schneider, Anna, 2015. "The value of network neutrality to European consumers," 26th European Regional ITS Conference, Madrid 2015 127121, International Telecommunications Society (ITS).
    6. Wei Dai & Kam Yu, 2019. "Contestability in the Digital Music Player Market," Journal of Industry, Competition and Trade, Springer, vol. 19(2), pages 293-311, June.
    7. Ying-Ju Chen & Ke-Wei Huang, 2016. "Pricing Data Services: Pricing by Minutes, by Gigs, or by Megabytes per Second?," Information Systems Research, INFORMS, vol. 27(3), pages 596-617.
    8. Kim, Wook Joon & Kim, Yongkyu, 2018. "An estimation of quality-adjusted prices for mobile services in Korea," 22nd ITS Biennial Conference, Seoul 2018. Beyond the boundaries: Challenges for business, policy and society 190346, International Telecommunications Society (ITS).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. W. Erwin Diewert, 1995. "Price and Volume Measures in the System of National Accounts," NBER Working Papers 5103, National Bureau of Economic Research, Inc.
    2. Diewert W.Erwin & Lippe Peter von der, 2010. "Notes on Unit Value Index Bias," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(6), pages 690-708, December.
    3. Redding, Stephen J. & Weinstein, David E., 2016. "A unified approach to estimating demand and welfare," LSE Research Online Documents on Economics 67681, London School of Economics and Political Science, LSE Library.
    4. David M. Cutler & Mark B. McClellan & Joseph P. Newhouse & Dahlia K. Remler, 2001. "Pricing Heart Attack Treatments," NBER Chapters, in: Medical Care Output and Productivity, pages 305-362, National Bureau of Economic Research, Inc.
    5. Banzhaf, H. Spencer, 2002. "Quality Adjustment for Spatially-Delineated Public Goods: Theory and Application to Cost-of-Living Indices in Los Angeles," RFF Working Paper Series dp-02-10-, Resources for the Future.
    6. B. Balk & H. Lorenz & J. Whalley & V. Valli & M. Kräkel, 1999. "Book reviews," Journal of Economics, Springer, vol. 69(1), pages 96-111, February.
    7. Trajtenberg, Manuel, 1989. "Product Innovations, Price Indices and the (Mis)Measurement of Economic Performance," Foerder Institute for Economic Research Working Papers 275471, Tel-Aviv University > Foerder Institute for Economic Research.
    8. Scott Roger, 1997. "A robust measure of core inflation in New Zealand, 1949-96," Reserve Bank of New Zealand Discussion Paper Series G97/7, Reserve Bank of New Zealand.
    9. Jacek Białek, 2011. "Remarks about the generalizations of the Fisher index," Statistics in Transition new series, Główny Urząd Statystyczny (Polska), vol. 12(1), pages 139-156, August.
    10. Silver Mick, 2022. "Econometric Issues in Hedonic Property Price Indices: Some Practical Help," Journal of Official Statistics, Sciendo, vol. 38(1), pages 153-186, March.
    11. Ivancic, Lorraine & Erwin Diewert, W. & Fox, Kevin J., 2011. "Scanner data, time aggregation and the construction of price indexes," Journal of Econometrics, Elsevier, vol. 161(1), pages 24-35, March.
    12. Marvin B. Lieberman & Natarajan Balasubramanian & Roberto Garcia‐Castro, 2018. "Toward a dynamic notion of value creation and appropriation in firms: The concept and measurement of economic gain," Strategic Management Journal, Wiley Blackwell, vol. 39(6), pages 1546-1572, June.
    13. William A. Barnett & Milka Kirova & Meenakshi Pasupathy & Piyu Yue, 1996. "Estimating Policy-Invariant Technology and Taste Parameters in the Financial Sector, When Risk and Growth Matter," Macroeconomics 9602002, University Library of Munich, Germany.
    14. Sadia Tahir, 2003. "Core Inflation Measures for Pakistan," SBP Working Paper Series 04, State Bank of Pakistan, Research Department.
    15. William A. Barnett & Yi Liu & Haiyang Xu & Mark Jensen, 1996. "The CAPM Risk Adjustment Needed for Exact Aggregation over Financial Assets," Econometrics 9602003, University Library of Munich, Germany.
    16. Erwin Diewert, 2009. "The aggregation of capital over vintages in a model of embodied technical progress," Journal of Productivity Analysis, Springer, vol. 32(1), pages 1-19, August.
    17. Amartya K. Sen, 1997. "From Income Inequality to Economic Inequality," Southern Economic Journal, John Wiley & Sons, vol. 64(2), pages 384-401, October.
    18. Leonard I. Nakamura, 2010. "Intangible Assets And National Income Accounting," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(s1), pages 135-155, June.
    19. Víctor Iturra & Dusan Paredes, 2014. "Construction of a Spatial Housing Price Index by Estimating an Almost Ideal Demand System," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 105(3), pages 301-314, July.
    20. Jack E. Triplett, 1991. "Hedonic Methods in Statistical Agency Environments: An Intellectual Biopsy," NBER Chapters, in: Fifty Years of Economic Measurement: The Jubilee of the Conference on Research in Income and Wealth, pages 207-238, National Bureau of Economic Research, Inc.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:42:y:2010:i:15:p:1973-1994. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.