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Hedonic Imputation versus Time Dummy Hedonic Indexes (with a commentary by Jan de Haan)

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  • Diewert, Erwin
  • Saeed , Heravi
  • Silver, Mick

Abstract

Statistical 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.

Suggested Citation

  • Diewert, Erwin & Saeed , Heravi & Silver, Mick, 2008. "Hedonic Imputation versus Time Dummy Hedonic Indexes (with a commentary by Jan de Haan)," Economics working papers diewert-08-01-02-09-14-52, Vancouver School of Economics, revised 02 Jan 2008.
    • Handle: RePEc:ubc:bricol:diewert-08-01-02-09-14-52
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    File URL: http://microeconomics.ca/erwin_diewert/time.pdf
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    Cited by:

    1. Alexander Daminger, 2021. "Subsidies to Homeownership and Central City Rent," Working Papers 210, Bavarian Graduate Program in Economics (BGPE).
    2. Laurs, Dries & Renneboog, Luc, 2019. "My kingdom for a horse (or a classic car)," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 58(C), pages 184-207.

    More about this item

    Keywords

    Hedonic regressions; hedonic indexes; consumer price indexes; superlative indexes.;
    All these keywords.

    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; Data Access
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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