Hedonic Imputation versus Time Dummy Hedonic Indexes (with a commentary by Jan de Haan)
AbstractStatistical offices try to match item models when measuring inflation between two periods. However, for product areas with a high turnover of differentiated models, the use of hedonic indexes is more appropriate since they include the prices and quantities of unmatched new and old models. The two main approaches to hedonic indexes are hedonic imputation (HI) indexes and dummy time hedonic (HD) indexes. This study provides a formal analysis of the difference between the two approaches for alternative implementations of an index that uses weighting that is comparable to the weighting used by the Tornqvist superlative index in standard index number theory. This study shows exactly why the results may differ and discusses the issue of choice between these approaches. An illustrative study for desktop PCs is provided.
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Bibliographic InfoPaper provided by UBC Department of Economics in its series UBC Departmental Archives with number diewert-08-01-02-09-14-52.
Length: 36 pages
Date of creation: 02 Jan 2008
Date of revision: 02 Jan 2008
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Hedonic regressions; hedonic indexes; consumer price indexes; superlative indexes.;
Find related papers by JEL classification:
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
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