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Measuring housing services inflation

Author

Listed:
  • Theodore M. Crone
  • Leonard I. Nakamura
  • Richard Voith

Abstract

Recent papers have questioned the accuracy of the Bureau of Labor Statistics' methodology for measuring implicit rents for owner-occupied housing. The authors propose cross-checking the BLS statistics by using data on owner-occupied and rental housing from the American Housing Survey. A hedonic approach that explicitly calculates capitalization rates appears to be a feasible one for developing a methodologically consistent measure of the rental cost of owner-occupied housing.

Suggested Citation

  • Theodore M. Crone & Leonard I. Nakamura & Richard Voith, 1999. "Measuring housing services inflation," Working Papers 99-9, Federal Reserve Bank of Philadelphia.
  • Handle: RePEc:fip:fedpwp:99-9
    as

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    References listed on IDEAS

    as
    1. Linneman, Peter & Voith, Richard, 1991. "Housing price functions and ownership capitalization rates," Journal of Urban Economics, Elsevier, vol. 30(1), pages 100-111, July.
    2. repec:ucp:bknber:9780226304557 is not listed on IDEAS
    3. W. Erwin Diewert & Kevin J. Fox, 1999. "Can measurement error explain the productivity paradox?," Canadian Journal of Economics, Canadian Economics Association, vol. 32(2), pages 251-280, April.
    4. Zvi Griliches, 1998. "Productivity, R&D, and the Data Constraint," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 347-374 National Bureau of Economic Research, Inc.
    5. Linneman, Peter, 1980. "Some empirical results on the nature of the hedonic price function for the urban housing market," Journal of Urban Economics, Elsevier, vol. 8(1), pages 47-68, July.
    6. Robert J. Gordon, 1990. "The Measurement of Durable Goods Prices," NBER Books, National Bureau of Economic Research, Inc, number gord90-1.
    7. David Genesove, 2003. "The Nominal Rigidity of Apartment Rents," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 844-853, November.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Hoffmann, Johannes & Kurz, Claudia, 2002. "Rent indices for housing in West Germany 1985 to 1998," Working Paper Series 0116, European Central Bank.
    2. Randal Verbrugge, 2008. "The Puzzling Divergence Of Rents And User Costs, 1980-2004," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(4), pages 671-699, December.
    3. Theodore M. Crone & Leonard I. Nakamura & Richard Voith, 2004. "Hedonic estimates of the cost of housing services: rental and owner-occupied units," Working Papers 04-22, Federal Reserve Bank of Philadelphia.
    4. Bajari, Patrick & Benkard, C. Lanier & Krainer, John, 2005. "House prices and consumer welfare," Journal of Urban Economics, Elsevier, vol. 58(3), pages 474-487, November.
    5. David E. Lebow & Jeremy B. Rudd, 2003. "Measurement Error in the Consumer Price Index: Where Do We Stand?," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 159-201, March.
    6. Thesia I. Garner & Randal Verbrugge, 2007. "Puzzling Divergence of U.S. Rents and User Costs, 1980-2004: Summary and Extensions," Working Papers 409, U.S. Bureau of Labor Statistics.
    7. W. Erwin Diewert, 2009. "Durables and Owner-Occupied Housing in a Consumer Price Index," NBER Chapters,in: Price Index Concepts and Measurement, pages 445-500 National Bureau of Economic Research, Inc.
    8. Kurz, Claudia & Hoffmann, Johannes, 2004. "A rental-equivalence index for owner-occupied housing in West Germany 1985 to 1998," Discussion Paper Series 1: Economic Studies 2004,08, Deutsche Bundesbank.
    9. David E. Lebow & Jeremy B. Rudd, 2001. "Measurement error in the consumer price index: where do we stand?," Finance and Economics Discussion Series 2001-61, Board of Governors of the Federal Reserve System (U.S.).
    10. Joshua H. Gallin, 2004. "The long-run relationship between house prices and rents," Finance and Economics Discussion Series 2004-50, Board of Governors of the Federal Reserve System (U.S.).
    11. Arévalo, Raquel & Ruiz-Castillo, Javier, 2004. "The rental equivalence approach to nonrental housing in the consumer price index. evidence from Spain," UC3M Working papers. Economics we041704, Universidad Carlos III de Madrid. Departamento de Economía.

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    Keywords

    Consumer price indexes ; Housing;

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