IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Age effects, unobserved characteristics and hedonic price indexes: The Spanish car market in the 1990?s

  • Xosé-Luís Varela-Irimia

    ()

    (Universitat Rovira i Virgili, Departament d'?Economia, Av. Universitat, 1. 43204 Reus, Spain.)

This paper computes and compares alternative quality-adjusted price indexes for new cars in Spain in the period 1990-2000. The proposed hedonic approach simultaneously controls for time-invariant unobserved product e¤ects and time-variant unobserved quality changes, that are assumed to be captured by model age e¤ects. The results show that the non-adjusted price index largely overstates the increase in the cost of living induced by changes in car prices and that previous evidence for this market have not measured the real extent of that bias, probably due to the omission of controls for unobservables. It is also shown that omitting age effects can also lead to misleading conclusions. The estimated price indexes give also some insights on what could have been the determinants of price evolution in the Spanish car market.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.xreap.cat/RePEc/xrp/pdf/XREAP2011-11.pdf
File Function: First version, 2011
Download Restriction: no

File URL: http://www.xreap.cat/RePEc/xrp/pdf/XREAP2011-11.pdf
File Function: Revised version, 2011
Download Restriction: no

Paper provided by Xarxa de Referència en Economia Aplicada (XREAP) in its series Working Papers with number XREAP2011-11.

as
in new window

Length: 45 pages
Date of creation: Aug 2011
Date of revision: Aug 2011
Handle: RePEc:xrp:wpaper:xreap2011-11
Contact details of provider: Postal:
Fundació Bosch i Gimpera, C. Baldiri i Reixac, 4-8, 08028 Barcelona

Phone: +34934033770
Web page: http://www.xreap.cat
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Francisco Requena-Silvente & James Walker, 2006. "Calculating Hedonic Price Indices with Unobserved Product Attributes: An Application to the UK Car Market," Economica, London School of Economics and Political Science, vol. 73(291), pages 509-532, 08.
  2. Christos Ioannidis & Mick Silver, 2003. "Chained, exact and superlative hedonic price changes: estimates from microdata," Applied Economics, Taylor & Francis Journals, vol. 35(9), pages 1005-1014.
  3. Tim Erickson & Ariel Pakes, 2011. "An Experimental Component Index for the CPI: From Annual Computer Data to Monthly Data on Other Goods," American Economic Review, American Economic Association, vol. 101(5), pages 1707-38, August.
  4. 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.
  5. Mick Silver & Saeed Heravi, 2004. "Hedonic Price Indexes and the Matched Models Approach," Manchester School, University of Manchester, vol. 72(1), pages 24-49, 01.
  6. P. D. Chwelos & E. R. Berndt & I. M. Cockburn, 2008. "Faster, smaller, cheaper: an hedonic price analysis of PDAs," Applied Economics, Taylor & Francis Journals, vol. 40(22), pages 2839-2856.
  7. Mario Izquierdo & Omar Licandro & Alberto Maydeu, 2001. "Car quality improvements and price indices in Spain," Estudios Económicos, Banco de España;Estudios Económicos Homepage, number 72, October.
  8. Michael J. Boskin, 1998. "Consumer Prices, the Consumer Price Index, and the Cost of Living," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 3-26, Winter.
  9. Feenstra, R.C., 1995. "Exact Hedonic Price Indexes," Papers 95-11, California Davis - Institute of Governmental Affairs.
  10. Hugo J. Reis & J.M.C. Santos Silva, 2003. "Hedonic Prices Indexes for New Passenger Cars in Portugal (1997- 2001)," Econometrics 0303003, EconWPA.
  11. Jan van Dalen & Ben Bode, 2004. "Quality-corrected price indices: the case of the Dutch new passenger car market, 1990-1999," Applied Economics, Taylor & Francis Journals, vol. 36(11), pages 1169-1197.
  12. Triplett, Jack E, 1969. "Automobiles and Hedonic Quality Measurement," Journal of Political Economy, University of Chicago Press, vol. 77(3), pages 408-17, May/June.
  13. Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053, November.
  14. Cowling, Keith & Cubbin, John, 1972. "Hedonic Price Indexes for United Kingdom Cars," Economic Journal, Royal Economic Society, vol. 82(327), pages 963-78, September.
  15. Olympia Bover & Mario Izquierdo, 2003. "Quality-adjusted prices: hedonic methods and implications for national accounts," Investigaciones Economicas, Fundación SEPI, vol. 27(2), pages 199-238, May.
  16. C. Lanier Benkard & Patrick Bajari, 2005. "Hedonic Price Indexes With Unobserved Product Characteristics, and Application to Personal Computers," Journal of Business & Economic Statistics, American Statistical Association, vol. 23, pages 61-75, January.
  17. Kenneth Brown, 2000. "Hedonic price indexes and the distribution of buyers across the product space: an application to mainframe computers," Applied Economics, Taylor & Francis Journals, vol. 32(14), pages 1801-1808.
  18. 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.
  19. Anna Matas & Josep-Lluis Raymond, 2009. "Hedonic prices for cars: an application to the Spanish car market, 1981-2005," Applied Economics, Taylor & Francis Journals, vol. 41(22), pages 2887-2904.
  20. Ohta, Makoto, 1987. "Gasoline Cost and Hedonic Price Indexes of U.S. Used Cars for 1970-1983," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(4), pages 521-28, October.
  21. Jonathan Murray & Nicholas Sarantis, 1999. "Price-Quality Relations and Hedonic Price Indexes for Cars in the United Kingdom," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 6(1), pages 5-27.
  22. Gian Maria Tomat, 2002. "Durable goods, price indexes and quality change: an application to automobile prices in Italy, 1988-1998," Temi di discussione (Economic working papers) 439, Bank of Italy, Economic Research and International Relations Area.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:xrp:wpaper:xreap2011-11. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (XREAP)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.