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Quality-adjusted prices: hedonic methods and implications for national accounts

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Abstract

Rapid technological progress in recent years has exacerbated the problems that arise in measuring price changes and, consequently, economic magnitudes at constant prices when changes in the quality of products occur. A natural means of tackling these measurement problems is to use hedonic price indices. This survey focuses on the use of hedonic methodology and its implications for the construction of deflators for significant National Accounts aggregates. It thus describes what hedonic methodology involves and analyses the various hedonic studies existing in the literature and the use made of hedonic methodology by different public statistics offices in the computers and related equipment, cars, and housing sectors. Finally, the implications of the use of these hedonic techniques for the estimation in real terms of macroeconomic magnitudes are reviewed.

Suggested Citation

  • Olympia Bover & Mario Izquierdo, 2003. "Quality-adjusted prices: hedonic methods and implications for national accounts," Investigaciones Economicas, Fundación SEPI, vol. 27(2), pages 199-238, May.
    • Handle: RePEc:iec:inveco:v:27:y:2003:i:2:p:199-238
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    Cited by:

    1. Reis, Hugo J. & Santos Silva, J.M.C., 2006. "Hedonic prices indexes for new passenger cars in Portugal (1997-2001)," Economic Modelling, Elsevier, vol. 23(6), pages 890-908, December.
    2. Abdul Hamid Mar Iman & Fu Yek Pieng & Christopher Gan, 2012. "A Conjoint Analysis of Buyers' Preferences for Residential Property," International Real Estate Review, Global Social Science Institute, vol. 15(1), pages 73-105.
    3. Xosé-Luís Varela-Irimia, 2014. "Age effects, unobserved characteristics and hedonic price indexes: The Spanish car market in the 1990s," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 5(4), pages 419-455, November.
    4. Ad van Riet & Moreno Roma, 2006. "Competition, productivity and prices in the euro area services sector," Occasional Paper Series 44, European Central Bank.
    5. Jorge Durán & Omar Licandro & Luis A. Puch, 2006. "Sobre la medición del crecimiento económico en presencia de progreso técnico incorporado," Working Papers 2006-24, FEDEA.

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    More about this item

    Keywords

    Hedonic Price Indices; Deflactors; Computers; Housing; Cars;
    All these keywords.

    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
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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