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Measuring price dynamics of package holidays with transaction data

Author

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  • Henn, Karola
  • Islam, Chris-Gabriel
  • Schwind, Patrick
  • Wieland, Elisabeth

Abstract

In Germany, package holidays are an important driver of consumer prices. Several challenges arise when measuring the price development of these bundled travel and accommodation services, such as the quality of accommodation and the timing of booking. Statistical practices are currently based on sampling offer prices. By using actual bookings, this paper analyses the possibilities and challenges in compiling a price index out of transaction data for flight package holidays. Our dataset comprises both online bookings and bookings made via stationary travel agencies on a daily basis. The large sample size allows for a disaggregation by individual holiday destination. Several methodological issues such as product definition, the grouping of unstructured text information, and weighting are addressed. Moreover, various index aggregation methods are analysed, which include hedonic regressions, stratification, and also a multilateral index method. Applied to six major holiday destinations for German travellers, all transaction-based methods under consideration exhibit similar price dynamics, pointing to robust results for destinationbased price indicators for package holidays.

Suggested Citation

  • Henn, Karola & Islam, Chris-Gabriel & Schwind, Patrick & Wieland, Elisabeth, 2020. "Measuring price dynamics of package holidays with transaction data," Discussion Papers 24/2020, Deutsche Bundesbank.
    • Handle: RePEc:zbw:bubdps:242020
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    References listed on IDEAS

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    1. Eurostat, 2013. "Handbook on Residential Property Prices Indices," World Bank Publications - Books, The World Bank Group, number 17280, December.
    2. Robert Hill, 2011. "Hedonic Price Indexes for Housing," OECD Statistics Working Papers 2011/1, OECD Publishing.
    3. Nagengast, Arne J. & Bursian, Dirk & Menz, Jan-Oliver, 2021. "Dynamic pricing and exchange rate pass-through: Evidence from transaction-level data," European Economic Review, Elsevier, vol. 133(C).
    4. Jan de Haan & Frances Krsinich, 2018. "Time Dummy Hedonic and Quality‐Adjusted Unit Value Indexes: Do They Really Differ?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(4), pages 757-776, December.
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    Cited by:

    1. Nagengast, Arne J. & Bursian, Dirk & Menz, Jan-Oliver, 2021. "Dynamic pricing and exchange rate pass-through: Evidence from transaction-level data," European Economic Review, Elsevier, vol. 133(C).

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    More about this item

    Keywords

    Consumer prices; transaction data; hedonic regressions; quality adjustment; multilateral index number methods;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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