Convenient links for the estimation of hedonic price indexes:the case of unique, infrequently traded assets
AbstractHedonic methods are a prominent approach in the construction of quality-adjusted price indexes. This paper shows that the process of computing such indexes is substantially simplified if arithmetic (geometric) price indexes are computed based on exponential (log-linear) hedonic functions estimated by the Poisson pseudo maximum likelihood (ordinary least squares) method. A Monte Carlo simulation study based on housing data illustrates the convenience of the links identified and the very attractive properties of the Poisson estimator in the hedonic framework.
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Bibliographic InfoPaper provided by University of Evora, CEFAGE-UE (Portugal) in its series CEFAGE-UE Working Papers with number 2014_01.
Length: 35 pages
Date of creation: 2014
Date of revision:
Hedonic price indexes; Quality adjustment; Retransformation; House prices; Exponential regression; Poisson pseudo maximum likelihood.;
Find related papers by JEL classification:
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-02-02 (All new papers)
- NEP-CUL-2014-02-02 (Cultural Economics)
- NEP-ECM-2014-02-02 (Econometrics)
- NEP-MAC-2014-02-02 (Macroeconomics)
- NEP-URE-2014-02-02 (Urban & Real Estate Economics)
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