Statistical Theory of Hedonic Price Indices
AbstractIn the economic literature, essentially, hedonic techniques either are applied straightforwardly or the economic foundations of the hedonic hypothesis are discussed. In this paper, the statistical foundations of hedonic price indices are developed. After a short overview on well-known functional forms of hedonic equations, first, precise hedonic notions of a good and its price are specified. These specifications allow a clear-cut definition of true hedonic price indices. Then, the problem of estimating hedonic price indices is treated. It is shown, first, that the usual hedonic price index formulae result from estimating certain true indices in a special way and, second, that the techniques used in practice for estimating hedonic indices are just first approaches.
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Bibliographic InfoPaper provided by Department of Quantitative Economics, University of Freiburg/Fribourg Switzerland in its series DQE Working Papers with number 1.
Length: 18 pages
Date of creation: Aug 2002
Date of revision: Aug 2003
Hedonic regression; functional forms of hedonic equations; hedonic price of a good; true hedonic price index; true hedonic Laspeyres price index; true hedonic Paasche price index; true adjacent periods price index; estimated hedonic price indices;
Find related papers by JEL classification:
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
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