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Stable and Reliable Monthly Repeat Rent Indices: A Robust Approach

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  • Kris Boudt
  • Koen Inghelbrecht

Abstract

Repeat rent indices measure changes in rent prices over time by tracking the same rental units across different lease periods, thereby isolating pure rent inflation unaffected by shifts in housing quality or composition. Their main advantage is that they accurately capture the endof-month cost of private tenancy without requiring additional information on dwelling characteristics. This explains their popularity as an input for the calculation of the consumer price index. A disadvantage is that their traditional implementation using ordinary least squares (OLS) estimation at a monthly frequency shows high sensitivity to revisions as the information in newly signed contracts require updating the prior rent evolution. In an extensive application to Belgian rent price data, we find that, using a robust M-estimator in combination with lease signature dates results in indices that share the same trend, but display significantly lower revision variability than the standard OLS-based indices.

Suggested Citation

  • Kris Boudt & Koen Inghelbrecht, 2025. "Stable and Reliable Monthly Repeat Rent Indices: A Robust Approach," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 25/1126, Ghent University, Faculty of Economics and Business Administration.
    • Handle: RePEc:rug:rugwps:25/1126
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    File URL: http://wps-feb.ugent.be/Papers/wp_25_1126.pdf
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