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Rent indices for housing in West Germany 1985 to 1998

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  • Hoffmann, Johannes
  • Kurz, Claudia

Abstract

In several studies, hedonic methods have been used successfully for the ex post assessment of the accuracy of inflation measurement. Most of those studies relate to high-tech products, with respect to which traditional methods of compiling price indices often fail. We apply hedonic methods to rental housing services, which display less quality progress. However, as German households devote about 10 % of their total expenditure to rented housing services, even a small bias in this field might induce a substantial distortion in overall inflation measurement. On the basis of data from the German Socio-Economic Panel, we perform a hedonic analysis of housing rents and compile different price indices. Overall, we conclude that there is some evidence of an understatement of rent inflation in the official rent index for West Germany at the beginning of the 1990s. JEL Classification: C21, C43, D12, E31

Suggested Citation

  • Hoffmann, Johannes & Kurz, Claudia, 2002. "Rent indices for housing in West Germany 1985 to 1998," Working Paper Series 0116, European Central Bank.
  • Handle: RePEc:ecb:ecbwps:20020116
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    References listed on IDEAS

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    Cited by:

    1. Konstantin A. Kholodilin & Julien Licheron, 2017. "Macroeconomic Effects of Rental Housing Regulations: The Case of Germany in 1950-2015," Discussion Papers of DIW Berlin 1649, DIW Berlin, German Institute for Economic Research.
    2. Tomat, Gian Maria, 2002. "Durable goods, price indexes and quality change: an application to automobile prices in Italy, 1988-1998," Working Paper Series 0118, European Central Bank.
    3. 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.
    4. Konstantin A. Kholodilin & Claus Michelsen & Dirk Ulbricht, 2014. "Speculative Price Bubbles in Urban Housing Markets in Germany," Discussion Papers of DIW Berlin 1417, DIW Berlin, German Institute for Economic Research.
    5. Bernd Fitzenberger & Benjamin Fuchs, 2017. "The Residency Discount for Rents in Germany and the Tenancy Law Reform Act 2001: Evidence from Quantile Regressions," German Economic Review, Verein für Socialpolitik, vol. 18(2), pages 212-236, May.
    6. Rondinelli, Concetta & Veronese, Giovanni, 2011. "Housing rent dynamics in Italy," Economic Modelling, Elsevier, vol. 28(1), pages 540-548.
    7. Konstantin Kholodilin, 2015. "Speculative Bubbles in Urban Housing Markets in Germany," ERSA conference papers ersa15p67, European Regional Science Association.

    More about this item

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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