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When do matched-model and hedonic techniques yield similar measures?

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Abstract

Hedonic techniques were developed to control for quality differences across goods and over time in order to construct constant-quality aggregate price measures. When the available data are a panel of high-frequency data on models whose characteristics are constant over time, matched-model price indexes can also be used to obtain constant quality price measures. We show this by demonstrating that, given data of this type, certain matched-model indexes yield price measures that are numerically close to those obtained using hedonic techniques. ; * This paper is a condensed version of a paper that was presented at the CRIW workshop on Price Measurement at the NBER Summer Institute, July 31-August 1, 2000 and is available at http://www.nber.org.

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  • Ana M. Aizcorbe & Carol Corrado & Mark Doms, 2003. "When do matched-model and hedonic techniques yield similar measures?," Working Paper Series 2003-14, Federal Reserve Bank of San Francisco.
    • Handle: RePEc:fip:fedfwp:2003-14
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    References listed on IDEAS

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    5. Ariel Pakes, 2003. "A Reconsideration of Hedonic Price Indexes with an Application to PC's," American Economic Review, American Economic Association, vol. 93(5), pages 1578-1596, December.
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    7. Hausman, Jerry, 1999. "Cellular Telephone, New Products, and the CPI," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(2), pages 188-194, April.
    8. Ana M. Aizcorbe, 2003. "The stability of dummy variable price measures obtained from hedonic regressions," Finance and Economics Discussion Series 2003-05, Board of Governors of the Federal Reserve System (U.S.).
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    Cited by:

    1. Alan G. White & Jaison R. Abel & Ernst R. Berndt & Cory W. Monroe, 2010. "Hedonic Price Indexes for Personal Computer Operating Systems and Productivity Suites," NBER Chapters, in: Contributions in Memory of Zvi Griliches, pages 787-807, National Bureau of Economic Research, Inc.
    2. David Byrne & Brian K. Kovak & Ryan Michaels, 2013. "Price and Quality Dispersion in an Offshoring Market: Evidence from Semiconductor Production Services," NBER Working Papers 19637, National Bureau of Economic Research, Inc.
    3. Parkhomenko, Alexander & Redkina, Anastasia, 2006. "Эконометрические Оценки Гедонических Индексов Цен На Персональные Компьютеры В России: Пример Рынка Г. Екатеринбурга [Estimating Hedonic Price Indices for Personal Computers in Russia]," MPRA Paper 1506, University Library of Munich, Germany, revised 07 Nov 2006.
    4. Alberto Cavallo & Roberto Rigobon, 2016. "The Billion Prices Project: Using Online Prices for Measurement and Research," Journal of Economic Perspectives, American Economic Association, vol. 30(2), pages 151-178, Spring.
    5. Robert J. Gordon, 2009. "Apparel Prices 1914–93 and the Hulten/Bruegel Paradox," NBER Chapters, in: Price Index Concepts and Measurement, pages 85-128, National Bureau of Economic Research, Inc.
    6. Nobuhiro Abe & Kimiaki Shinozaki, 2018. "Compilation of Experimental Price Indices Using Big Data and Machine Learning:A Comparative Analysis and Validity Verification of Quality Adjustments," Bank of Japan Working Paper Series 18-E-13, Bank of Japan.
    7. Mark Doms, 2005. "Communications Equipment: What Has Happened to Prices?," NBER Chapters, in: Measuring Capital in the New Economy, pages 323-362, National Bureau of Economic Research, Inc.
    8. Ana Aizcorbe & Nicole Nestoriak, 2010. "Price Indexes for Drugs: A Review of the Issues," BEA Working Papers 0050, Bureau of Economic Analysis.
    9. Carol Corrado & Wendy E. Dunn & Maria Ward Otoo, 2006. "Incentives and prices for motor vehicles: what has been happening in recent years?," Finance and Economics Discussion Series 2006-09, Board of Governors of the Federal Reserve System (U.S.).
    10. John S. Greenlees & Robert McClelland, 2011. "Does Quality Adjustment Matter for Technologically Stable Products? An Application to the CPI for Food," American Economic Review, American Economic Association, vol. 101(3), pages 200-205, May.

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