On the Imputation of Rental Prices to Owner-occupied Housing
This paper challenges the usual objections to the possibility of applying the rental equivalent approach to determine the weight that nonrental housing services should have in the Consumer Price Index (CPI). Using data from two Spanish household budget surveys, it is shown that market rents can be well represented in terms of an index of housing quality, two geographical variables, and the year of occupancy. This parsimonious empirical model is used to impute a rental value to nonrental housing units, taking into account the possible selection bias induced by systematic differences in housing characteristics between the market rental sector and the nonrental stock. On average, the estimated hedonic values are relatively close to the self-imputations provided in the household surveys by the occupants of such dwellings. Therefore, using either of the two alternatives to assess the importance of nonrental housing services in the CPI have small consequences for inflation. Instead, dropping these services from the CPI creates a downward bias in the measurement of inflation of 0.33 percentage points per year during 1985â€“1992, and an upward bias of 0.38 percentage points per year during 1993 to 2000. (JEL: C43, D12, R21, C21, E31) Copyright (c) 2006 by the European Economic Association.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 4 (2006)
Issue (Month): 4 (06)
|Contact details of provider:|| Web page: http://www.mitpressjournals.org/jeea|
|Order Information:||Web: http://www.mitpressjournals.org/jeea|
When requesting a correction, please mention this item's handle: RePEc:tpr:jeurec:v:4:y:2006:i:4:p:830-861. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kristin Waites)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.