Estimating hedonic price indexes for personal computers in russia: Case of Yekaterinburg
AbstractEconomists have been noting for decades that Consumer Price Index (CPI) in the developed countries is overstating inflation by 0,5−2,0% per year. A significant part of the bias is due to the presence of technology products and differentiated products in the CPI basket. An increase share of these products in the Russian CPI may also lead to a substantial upward bias. Nowadays hedonic indices are believed to be the most efficient way to reduce this bias. They can be used in two ways: to estimate the bias in CPI and to elaborate alternative official price indices for information and communication technology (ICT) products. We estimate a 25% fall in the price of personal computers for 20 months (03.04-11.05) using this method. A 25−44% upward bias in price index for PC in Russia was also calculated. We have found that the Russian CPI could be upward biased by 0,18-0,32% per year due to new goods and quality change effects for PC (given 1% expenditure share).
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 3135.
Date of creation: 05 Jan 2007
Date of revision:
CPI; price index; hedonic price index; CPI bias;
Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-12 (All new papers)
- NEP-CIS-2007-05-12 (Confederation of Independent States)
- NEP-ICT-2007-05-12 (Information & Communication Technologies)
- NEP-MAC-2007-05-12 (Macroeconomics)
- NEP-TRA-2007-05-12 (Transition Economics)
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.:
- Shane M. Greenstein & James B. Wade, 1998. "The Product Life Cycle in the Commercial Mainframe Computer Market, 1968-1982," RAND Journal of Economics, The RAND Corporation, vol. 29(4), pages 772-789, Winter.
- Shigenori Shiratsuka, 1999. "Measurement errors in Japanese Consumer Price Index," Working Paper Series WP-99-2, Federal Reserve Bank of Chicago.
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