Hedonic Imputation versus Time Dummy Hedonic Indexes
Statistical offices try to match item models when measuring inflation between two periods. However, for product areas with a high turnover of differentiated models, the use of hedonic indexes is more appropriate since they include unmatched new and old models. There are two main competing approaches to hedonic indexes are hedonic imputation (HI) indexes and dummy time hedonic (HD) indexes. This study provides a formal analysis of exactly why the results from the two approaches may differ and discusses the issue of choice between these approaches. An illustrative study for desktop PCs is provided.
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References listed on IDEAS
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- 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.
- Ariel Pakes, 2002. "A Reconsideration of Hedonic Price Indices with an Application to PC's," NBER Working Papers 8715, National Bureau of Economic Research, Inc.
- W. Erwin Diewert, 2003. "Hedonic Regressions. A Consumer Theory Approach," NBER Chapters, in: Scanner Data and Price Indexes, pages 317-348 National Bureau of Economic Research, Inc.
- Feenstra, R.C., 1995.
"Exact Hedonic Price Indexes,"
95-11, California Davis - Institute of Governmental Affairs.
- Robert C. Feenstra & Matthew D. Shapiro, 2003. "Scanner Data and Price Indexes," NBER Books, National Bureau of Economic Research, Inc, number feen03-1, October.
- Silver, Mick & Heravi, Saeed, 2005.
"A Failure in the Measurement of Inflation: Results From a Hedonic and Matched Experiment Using Scanner Data,"
Journal of Business & Economic Statistics,
American Statistical Association, vol. 23, pages 269-281, July.
- Silver, Mick & Heravi, Saeed, 2002. "A failure in the measurement of inflation: results from a hedonic and matched experiment using scanner data," Working Paper Series 0144, European Central Bank.
- Jack Triplett, 2004. "Handbook on Hedonic Indexes and Quality Adjustments in Price Indexes: Special Application to Information Technology Products," OECD Science, Technology and Industry Working Papers 2004/9, OECD Publishing.
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